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(Accounting rule) Financial dimension value used for summary account in Microsoft Dynamics 365 finance and operations

In this blog, I will be talking about the option available in (General ledger > Ledger setup. Parameters > Ledger > Accounting rule > Financial dimensions) where we see two options:

  1. Source document
  2. Accounting distribution

So, these two options are basically for posting financial dimension for summary accounts (Control accounts) like Payable, Receivable etc…

Let’s take one scenario of purchase order:

  1. Purchase order header has financial dimension business unit = 001
  2. Purchase order has two lines.
    1. Line -1 financial dimensions business unit =001
    1. Line-2 financial dimension business unit = 002

Now when we post invoice our accounting entry will be :

Debit Line -1 Cost/inventory with BU=001

Debit Line-2 Cost/inventory  with BU =002

            Credit Accounts payable summary account(Control Account) but what will be BU= ?

Will Credit go in BU =001 or 002 ? So that’s where this accounting setup helps us in posting

Option-1 Source document: If this is selected then accounting entry will be posted as per financial dimension selected in source document and what is source document here ? It is purchase order. So whatever dimension is selected in PO header will be on credit side .

Debit Line -1 Cost/inventory with BU=001

Debit Line-2 Cost/inventory  with BU =002

            Credit Accounts payable summary account(Control Account) with  BU= 001

Lets see in system

Create PO with two line

View distribution of both lines

View posted accounting entry

Option-2 Accounting distribution: If this is selected then accounting entry will be posted as per financial dimension selected on lines and what are the dimensions on lines ? Line -1 has 001 and line -2 has 002 so Credit side will have two lines in voucher with BU-001 and BU002

Debit Line -1 Cost/inventory with BU=001

Debit Line-2 Cost/inventory  with BU =002

            Credit Accounts payable summary account(Control Account) with  BU= 001

            Credit Accounts payable summary account(Control Account) with  BU= 002

Note: But if there are more than one line with same dimension then in voucher entry it will group by having same financial dimensions.

Lets see in system

View distribution of both lines in New PO

View posted accounting entry

That’s it for this blog, Hope this will help you .

Thank you !!! Keep reading and keep sharing !!!

This post was originally published on this site

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