Answer Posted / geevidhyadhar
Let us take up a NORMAL TRANSACTION ( relating to a sale
made to customer ) to understand what a SPECIAL GL
TRANSACTION and how it differs from a normal transaction.
NORMAL TRANSACTION explained in sequential order:
1. SALE TO CUSTOMER for US$100:
Customer Account Debit 100US$
(Individual Customer Account affected in Sub ledger and
Customer Reconciliation Account debited in GL)
Let us also remember that Customer Account is a CURRENT
ASSET in the Balance sheet (viz. money due to us pending
receipt from customer )
Sales Account Credit 100US$ (Sales Account affected in GL)
2. RECEIPT OF PAYMENT FROM CUSTOMER for 100US$
Bank account Debit 100US$ (Bank account affected in GL)
Customer Account Credit 100US$
(Individual Customer Account affected in Sub ledger and
Customer Reconciliation Account credited in GL)
The entire NORMAL transaction stands cleared. Please pay
special attention to the sequential order of events
mentioned above.
Now let us consider the following Scenario:
The customer makes a DOWNPAYMENT even before we make a Sale.
We raise our Sale invoice subsequently.
Here the sequential order of events is the other way around
though the transaction pertains to a customer sale and
collection of payment from him / her.
If downpayment has been received from a customer and we are
yet to raise our Sale invoice, then the downpayment is a
CURRENT LIABILITY to our Customer on our part even though
customers are listed as current assets in the Balance Sheet.
Such Exceptional treatment is handled using an alternative
Reconciliation Account in the GL.
Let us journalize the SPECIAL GL TRANSACTION now:
3. RECEIPT OF DOWNPAYMENT FROM CUSTOMER US$100
BANK Account Debit US$100 (Bank account affected in GL)
Cutomer Account CREDIT US$100
(Individual Customer Account affected in Sub ledger and
a SPECIAL Customer Reconciliation Account debited in GL.
Please note that this reconciliation account would be
Listed as a Liability in the GL).
4. SALE TO CUSTOMER for US$100:
Customer Account Debit 100US$
(Individual Customer Account affected in Sub ledger and
NORMAL Customer Reconciliation Account debited in GL)
Sales Account Credit 100US$ (Sales Account affected in GL)
Please pay special attention to the sequential order of
events mentioned above.
While comparing transactions 3 and 4, we see that there is
an unadjusted debit in a NORMAL reconciliation account and
an anadjusted credit in a SPECIAL Reconciliation Account.
However, the sale as well as collection of payment stand
accounted. The only extra thing that we see is a customer
debit and customer credit remaining unadjusted in two
different reconciliation accounts ( a normal reconciliation
account as a current asset and a special reconciliation
account as a liability- both in the GL). This is reversed
by using the option downpayment clearing.
In general, any transaction which uses a different
sequential order of events is treated as a SPECIAL GL
TRANSACTION by creating ADDITIONAL RECONCILIATION ACCOUNTS
IN THE GL. This principle applies to Vendor related
transactions also.
Of course, there are a few other such transactions ( such
as downpayment requests, guarantee commitments etc. ) which
also happen using additional reconciliation accounts in the
GL but such transactions would not have any accounting
significance (BALANCE SHEET and PROFIT AND LOSS ACCOUNT DO
NOT get updated). They are for information purposes only
usually appearing as notes to balance sheet or serve as
mere reminders.
Please feel free to correct me if my understanding of
Special GL Transaction is ambiguous.
Thanks
VidhyaDhar
| Is This Answer Correct ? | 62 Yes | 8 No |
Post New Answer View All Answers
Explain what is validations and substitutions in sap?
Explain the usage of the financial statement version tool in sap software.
Describe mass change/how do you achieve this? : fi- asset accounting
how is company code different from a company?
Tell something about the credit-control area in the sap?
If you want to learn Free Sap FI Course online join "SAP Fi Free online Course group" on FB
What is the Pre-mapping and Matching?
Why it is necessary to block an asset master record? : fi- asset accounting
How do you calculate the cost for a by-product in sap?
What do you mean by organizational units in sap?
How often we modify costing sheet?
What is web? What is its purpose?
What is the dunning area? : fi- accounts receivable
What is the basic purpose of creating a profit center?
Give some examples of gl accounts that should be posted automatically through the system and how is this defined in the system?
