About accounting distributions and subledger journal entries for purchase orders
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
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.
Accounting distributions for purchase orders
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.
Note
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 |
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Stocked item |
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A procurement category, or an item that is not stocked |
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Fixed asset |
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Project defined on the purchase order line |
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Line discount |
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Purchase charge, entered on the Price and discount tab of the purchase order line |
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Line charge |
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Tax, with the following condition:
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Tax, with the following conditions:
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Tax, with the following conditions:
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Header charge |
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Header discount |
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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.)
Note
This button is available only if the Enable encumbrance process check box is selected in the General ledger parameters form.
Subledger journals for purchase orders
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.