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GeekInterview.com > Interview Questions > Oracle Apps > AR
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Question: encumbrance
Answer: how do you adjust encumbrance with a standard invoice? |
| June 06, 2009 06:21:32 |
#1 |
| RVS123 |
Member Since: June 2009 Total Comments: 1 |
RE: encumbrance
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In Oracle Applications, encumbrances are used with only AP-PO-GL modules and not AR. Budgets are created in GL. Typically, encumberances are used to reserve funds for a purchase you are going to make in future. Thus the available funds are calculated using the formula Budget amount minus encumberances minus actual expenses.
Encumberance feature can be used in Oracle Applications based on the setups in Financial Options in AP. Purchasing creates encumbrances when you reserve funds for a requisition or purchase order. Payables reverses the PO encumberances when you create accounting entries for invoices. |
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