Accounts details

[Former Member]

Hi all,

I want to ask meaning of following accounts and for what they are used with suitable example

1. clearing account

2. offsetting Account

The difference between two with respect to Asset accounting.

[JavedKamal]

Hi,

Clearing account is used when our business transaction is not complete e.g. if we received the delivery of goods but not invoice,

EXP./Mat. xxxx

GR/IR Clearing A/c xxxx

When we received the invoice again system will automatically hit this clearing account.

GR/IR Clearing A/c xxxx

Vendor A/c xxxx

All clearing accounts have Open Item Manage check on so we have to clear these account manually (F-03) or auto clearing (F.13).

In FI-AA with automatic offsetting entry, but without a link to a purchase order and without integration with Accounts Payable. This posting is normally used when the invoice has not yet been received, or when the invoice was posted by the Accounts Payable department beforehand in a separate step. The offsetting account also has to be cleared.

In FI-AA with automatic clearing of the offsetting entry: The first posting usually is made in FI-AP. The clearing account is cleared at the same time as the asset posting is made. It is also possible, however, for both departments to make postings in the opposite sequence: An asset is entered with automatic offsetting entry, and the clearing account is cleared with the credit posting of the incoming invoice.

Thanks

Javed