Sub-Ledger Accounts Terminology

Overview

This article covers the major key terms used throughout Rootstock Sub-Ledger Account functionality and its related articles.

Terminology

COA (General Ledger Chart of Accounts):  The ’Chart of Accounts’ is a listing of all ’General Ledger Accounts’ used in the financial application’s General Ledger of an organization.  The ’Chart’ is used by the financial application software to aggregate information into an entity's financial statements.

Rootstock Sub-Ledger Accounts:  Rootstock Sub-Ledger Accounts are used to record Inventory Cost Transactions. 
 

  NOTE  Sub-Ledger Accounts are each cross-referenced or "mapped" to a specific General Ledger Account within the financial application in use.

Inventory Cost Transactions:  Rootstock creates transactions which record the operational transaction activity.  The Cost Transactions are recorded against the Sub-Ledger Accounts in Rootstock ERP.  The Cost Transactions are passed over to the financial application's General Ledger in a "posted" status.

Journal Entry Number:  The unique ID of a Financial Journal Entry recorded in the Rootstock Inventory Cost Transaction record and hyperlinking to a Journal Entry in the Financial Application.

Financial Journal Entries:  These are financial application Journal Entries created by the Inventory Cost Transactions.

GL Type:  Represents a category to which Rootstock Sub-Ledger Accounts are associated. 

• The purpose of the GL Type is to prevent an inappropriate Rootstock Sub-Ledger Account from being selected.  

• The presentation of Rootstock Sub-Ledger Accounts for selection in a master / control record is filtered by the GL Type assigned to the Rootstock Sub-Ledger Account.

• The GL Types available are as follows:

  • Accrued AP:  (Used on Company Master) This GL Type Account is used to identify the accrued payables Rootstock Sub-Ledger Account.   This is the Rootstock Sub-Ledger Account credited on PO receipt and debited on a PO receipt reversal or RTV transaction to be able to select the accrued payables Rootstock Sub-Ledger Account on a Company Master record, its Rootstock Sub-Ledger GL Type must be “Accrued AP”.

  • Cost of Sales:  (Used on Sales Order Control) This GL Type Account is used to identify Cost of Sales Sub-Ledger Accounts. 

  • Cost of Sales Clearing:  (Used on the Sales Order Control) This GL Type Account is used as a clearing account between shipping of the product and creating sales invoice.

  • Deferred Costs:  (Used on Sales Order Control). These are costs that are incurred on a sales transaction, but will not be accounted for until a future period. Used with the Amortization feature.

  • Division to Division Variance:  (Used on Division Master) This GL Type Account is used to identify Division to Division Variance.  In a standard cost environment, when an item is transacted between Divisions, and there is a variance in the standard cost of the item, this account holds the value of the variance.

  • Division Transfer:  (Used on Company Master) This GL Type Account is used to identify Division Transfers. 

  • Expense:  (Used on Division Master) This GL Type Account is used to identify expense accounts. Multiple expense Sub-Ledger Accounts may be defined and can be set on Indirect Material or Service items. 

  • General Scrap:  (Used on Inventory Commodity Code) This GL Type Account is used to identify scrap accounts (production scrap and inventory scrap). When a scrap transaction is processed, a scrap Sub-Ledger Account is sourced from the Item’s assigned Inventory Commodity Code.  

  • Inventory:  (Used on Inventory Commodity Code). This GL Type Account is used to identify inventory accounts, such as raw material, purchased items, and finished goods.  

  • Inventory Adjustment:  (Used on Inventory Commodity Code) This GL Type Account is used as the offsetting account when an Inventory Adjustment is made. 

  • Inventory Negative Variance:  (Used on Inventory Commodity Code) This GL Type Account is used to identify the Inventory Negative Variance Account.

  • Liability Accounts:  (Used on Sales Order Control) This GL Type Account is used to identify liability accounts, such as sales tax payable. 

  • Non-Nettable:  (Used on Inventory Commodity Code) This GL Type account is used to identify non-nettable inventory accounts.  Non-nettable inventory is excluded from the planning process while valuing the inventory as on-hand and is not available to ship until moved to an on-hand inventory account.

  • OTH Clearing:  (Used on Division Master) This GL Type Account is used to identify other clearing accounts. 

  • Other:  (Used on Sales Order Control) This GL Type Account is used to identify other accounts.

  • POSUBWIP:  (Used on the Inventory Commodity Code) PO Subcontract WIP (Inventory Asset) - This Rootstock Sub-Ledger Account is the account charged with any charges to a Subcontract Purchase Order (PO).  When Components are issued to a Subcontract PO, this Account is debited, and when the PO is received or scrapped, this is the Account credited. 

  • PPV:  Purchase Price Variance (Used on Inventory Commodity Code) - used in a standard cost environment, to record the variance between an Item's standard cost and purchase (aka PO) price.

  • Revenue:  (Used on Sales Order Control File) This GL Type Account is used to identify revenue accounts.

  • Standards Change Variance:  (Used on Division Master) This GL Type Account is used to identify standards change variance in a standard cost environment.

  • Unearned Revenue:  (Used on Sales Order Control) This GL Type account is used to identify unearned revenue Accounts. Examples are deferred income invoice and deferred income credit card.

  • Variance:  (Used on Company Master) This GL Type Account is used to identify Variance accounts, such as Material Overhead, PO-Invoice Price Variance, and PO Receipt-Invoice Quantity Variance.

  • WIP:  (Used on Inventory Commodity Code) Work In Process Inventory).  When a transaction is processed that affects WIP, a WIP inventory Rootstock Sub-Ledger Account is sourced from the item’s assigned Inventory Commodity Code.  

  • WIP Clearing (Labor, Mach, Fringe):  (Used on Division Master) This GL Type Account is used to identify WIP clearing labor, machine and fringe charges.  When labor, machine, or fringe costs are charged to a Work Order, this Rootstock Sub-Ledger Account is credited and the WIP Account is debited.  

  • WO/SubC PO Variance:  (Used on Inventory Commodity Code) Work Order Subcontract Purchase Order Variance.  This GL Type Account is used to identify Work Order – Subcontract Purchase Order Variances and is the account debited or credited with the value of WO variances calculated at the time a Work Order is closed.

Notes on the Maintenance of Sub Ledger Accounts

• Over time, the maintenance of Sub-Ledger Accounts and the assignments of Sub-Ledger Accounts may require maintenance or change.  It important to note:

  • Sub-Ledger Accounts can be maintained to change the cross-referenced Financial General Ledger account. 

    • If such maintenance is done, transactions which have been processed prior to the change are not updated with the change.  

    • Transactions after the change has been made will reference the new Financial General Ledger Account.

  • Sub-Ledger Account assigned on Master records may be changed. 

    • If such a change is made, transactions which have been processed prior to the change are not updated with the Sub-Ledger change. 

    • Transactions after the change has been made will reference the new Sub-Ledger Account and its Financial General Ledger Account cross-reference.

SEE ALSO

Sub-Ledger Accounts