About accounting distributions and subledger journal entries for purchase orders [AX 2012]

Updated: February 5, 2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Accounting distributions are used to define how an amount will be accounted for, such as how the expense, asset, tax, or charges will be encumbered on the purchase order or accounted for on the product receipt or vendor invoice.

If you are using Budgeting or encumbrances, every amount that must be accounted for when the purchase order is confirmed will have one or more accounting distributions.

If you are not using Budgeting or encumbrances, every amount that must be accounted for on the product receipts or vendor invoices for the purchase order will have an accounting distribution. However, the accounting distribution might contain incomplete information, such as the ledger account. If the ledger account is incomplete, you might have to correct the ledger account on the purchase order or accounting distribution for the vendor invoice before you can journalize the product receipt and the vendor invoice.

You can use the following buttons in the Purchase order form to view, and possibly modify, the accounting distributions for each amount on the purchase order.

  • Distribute amounts – View and modify the accounting distributions for an individual line and any child lines, such as taxes or charges. You can also view and modify the accounting distributions for the child line directly from the Sales tax transactions form or the Charges transactions form.

    • Modify purchase order header amounts, such as charges or currency rounding amounts. (On the Action Pane, on the Purchase tab, in the Accounting group, click Distribute amounts.)

    • Modify purchase order line amounts. (In the Purchase order lines grid, click Financials > Distribute amounts.)

  • View distributions – View the accounting distributions for all lines on the document. You cannot modify the accounting distributions from this view.

    • View header and line amounts. (On the Action Pane, on the Financials tab, in the Accounting group, click View distributions.)

You can split accounting distributions for purchase order lines that contain items that are not stocked.

You cannot split, modify, or delete the purchase order lines in the following situations:

  • The purchase order line contains stocked items.

  • The purchase order line contains fixed assets.

  • The purchase order line includes charges, taxes, or discounts.

NoteNote

If the parent line contains an item that is not stocked and the accounting distributions are split, the child line will be split automatically to match the financial dimensions of the parent line. The accounting distributions for the child line cannot be additionally split or deleted, but depending on the setup of the child line, you might be able to modify the ledger account for the accounting distributions of the child line.

When you enter a purchase order, each line will be distributed as follows.

Type of purchase order line

Order of priority that determines where the default main account is displayed from

Order of priority that determines which default financial dimension is displayed

Stocked item

  1. The Main account field when Purchase expenditure for product is selected in the Posting form. (Click Inventory management > Setup > Posting > Posting.)

  1. Use the financial dimension values from the purchase order line.

A procurement category, or an item that is not stocked

  1. The Main account field when Purchase expenditure for expense is selected in the Posting form. (Click Inventory management > Setup > Posting > Posting.)

  1. If the Allocation check box is selected for the main account in the Main accounts - chart of accounts: %1 form, use the main account from the To account field in the Allocation rule form. (Click General ledger > Setup > Chart of accounts > Chart of accounts. Select a main account and then click Edit. Select Companies in the Select the level of main account to display field and select the Allocation check box. Click Allocation terms.)

  2. Use the financial dimension default template on the purchase order line.

  3. Use the financial dimension values that are defined on the purchase order line.

  4. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Fixed asset

  1. If Acquisition is selected in the Transaction type field on the Fixed assets tab of the purchase order line, the Main account field when Acquisition is selected in the Fixed asset posting profiles form. (Click Fixed assets > Setup > Fixed asset posting profiles.)

  2. If Acquisition adjustment is selected in the Transaction type field on the Fixed assets tab of the purchase order line, the Main account field when Acquisition adjustment is selected in the Fixed asset posting profiles form.

  1. Use the financial dimension values that are defined on the purchase order line.

  2. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Project defined on the purchase order line

  1. If Balance is selected in the Post costs - item field in the Project groups form, the Main account field when Cost is selected in the Ledger posting setup form. (Click Project management and accounting > Setup > Posting > Ledger posting setup.)

  2. If Profit and loss is selected in the Post costs - item field in the Project groups form, the Main account field when Cost - item is selected in the Ledger posting setup form.

  1. Use the financial dimension values that are defined on the purchase order line.

  2. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Line discount

  1. The Main account field when Discount is selected in the Posting form. (Click Inventory management > Setup > Posting > Posting.)

  2. If a discount main account is not defined on the posting profile, the accounting distribution for the extended price on the purchase order line.

  1. Use the financial dimension values on the accounting distributions for the extended price on the purchase order line.

  2. Use the financial dimensions that are defined on the purchase order line.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Purchase charge, entered on the Price and discount tab of the purchase order line

  1. The accounting distribution of the extended price on the purchase order line.

  1. Use the financial dimension values on the extended price of the accounting distributions for the purchase order line.

Line charge

  1. If Ledger account is selected in the debit Type field in the Charges code form, the debit Account field in the Charges code form. (Click Accounts payable > Setup > Charges > Charges code.)

  2. If Item is selected in the debit Type field in the Charges code form, the accounting distributions for the extended price on the purchase order line.

  3. If Customer/Vendor is selected in the debit Type field in the Charges code form, the credit Account field in the Charges code form.

  1. Use the financial dimension values on the accounting distributions for the extended price on the purchase order line.

  2. Use the accounting distributions from the purchase order line amount.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Tax, with the following condition:

  • The Apply U.S. taxation rules check box is selected in the General ledger parameters form.

  1. The extended price or the accounting distributions for the charge.

  1. Use the financial dimension values on the extended price for the purchase order line or the accounting distributions for the charge.

  2. Use the financial dimension values that are defined on the purchase order line.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Tax, with the following conditions:

  • The Apply U.S. taxation rules check box is cleared in the General ledger parameters form.

  • The Use tax check box for the sales tax group is cleared in the Sales tax groups form.

  1. If the tax amount is recoverable, the Sales tax receivable field in the Ledger posting groups form. (Click General ledger > Setup > Sales tax > Ledger posting groups.)

  2. If the sales tax amount is not recoverable, the extended price or the accounting distribution for the charge.

  1. Use the financial dimension values on the extended price for the purchase order line or the accounting distributions for the charge.

  2. Use the financial dimension values that are defined on the purchase order line.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Tax, with the following conditions:

  • The Apply U.S. taxation rules check box is cleared in the General ledger parameters form.

  • The Use tax check box for the sales tax group is selected in the Sales tax groups form.

  1. If the tax amount is recoverable, the Sales tax receivable field in the Ledger posting groups form. (Click General ledger > Setup > Sales tax > Ledger posting groups.)

  2. If the tax amount is not recoverable, the Use tax expense field in the Ledger posting groups form.

  1. Use the financial dimension values on the extended price for the purchase order line or the accounting distributions for the charge.

  2. Use the financial dimension values defined that are defined on the purchase order line.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Header charge

  1. If Ledger account is selected in the debit Type field in the Charges code form, the debit Account field in the Charges code form. (Click Accounts payable > Setup > Charges > Charges code.)

  2. If Customer/Vendor is selected in the debit Type field in the Charges code form, the credit Account field in the Charges code form.

  1. If the main account is an allocation account, use the default main account from the allocation terms.

  2. Use the financial dimension default template from the purchase order header.

  3. Use the financial dimension values from the purchase order header.

  4. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Header discount

  1. The Main account field for the Vendor invoice discount posting type in the Accounts for automatic transactions form. (Click General ledger > Setup > Posting > Accounts for automatic transactions.)

  1. Use the financial dimension values on the accounting distributions for the extended price on the purchase order line.

  2. Use the financial dimension values from the purchase order line.

  3. Use the default financial dimension values from the main account in the Main accounts - chart of accounts: %1 form.

Accounting distributions for taxes cannot be created until taxes are calculated. To calculate sales taxes, you must complete one of the following tasks in the Purchase order form:

  • View the sales tax. (On the Action Pane, on the Purchase tab, click Sales tax.)

  • View the purchase order total. (On the Action Pane, on the Purchase order tab, in the View group, click Totals.)

  • View the cash flow forecast. (On the Action Pane, on the Invoice tab, click Cash flow forecasts.)

  • View distributions. (On the Action Pane, on the Purchase tab, in the Accounting group, click View distributions.)

  • View the subledger journal. (On the Action Pane, on the Purchase tab, in the Accounting group, click Subledger journal.)

    NoteNote

    This button is available only if the Enable encumbrance process check box is selected in the General ledger parameters form.

Subledger journals are available on a purchase order only if encumbrances are enabled for commitment accounting. (Click General ledger > Setup > General ledger parameters. Click Ledger. On the Accounting rules FastTab, select the Use posting definitions check box and the Enable encumbrance process check box.) Before you confirm a purchase order, you can view the full accounting entry, which includes debits and credits, to verify that the encumbrance is being posted to the correct accounts. This view of the full accounting entry is called a subledger journal entry. You can do this in the Purchase order form by clicking the Purchase tab on the Action Pane. In the Accounting group, click Subledger journal.

If the subledger journal entry is incorrect when you preview it before you confirm the purchase order, you cannot modify the subledger journal entry. Instead, you must modify the posting definition that is used by the purchase order. The ledger account from the accounting distribution is used in the posting definition, together with the amount and whether the amount is a debit or a credit. The posting definition compares that ledger account to the account in the Match account number field in the Posting definitions form. If the amounts match, the ledger accounts to create the subledger journal entry will be displayed in the Generated entries field group. If there is no match, the amount on the distribution is not encumbered.


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