How Does the General Ledger Generate Accounts?

How Does the General Ledger Generate Accounts?

Understanding Account Generation in the General Ledger

Process:
  1. Start by defining your account format in the Custom Descriptions.
  2. Input the relevant prefixes and base accounts.
  3. Now, from the Setup menu, choose the Generate Accounts command. This allows the merging of every prefix combination with each base account, forming a comprehensive chart of accounts.
Specifics to Consider:

  1. Unit and Suspense Accounts: No accounts are produced if the Account Type is Units or Suspense.
  2. Balance Sheet Accounts:
    1. A 'Balance sheet prefix' is filled with zeros at all levels beneath the balance sheet level.
    2. If a General Ledger account is a type like Current Assets, Noncurrent Assets, and so on, the complete account is only formed if the matching Balance sheet prefix exists prior to executing Generate Accounts.
    3. Generate Accounts never creates these prefixes on its own.
    4. A notification appears if you miss creating the necessary Balance sheet prefix after the Generate Accounts task.

  3. Profit and Loss Accounts:
    1. Accounts of this type (Income, Cost, and similar) are created using every prefix, excluding 'Balance sheet prefixes'.
    2. If the balance sheet level is at its lowest, no Balance sheet prefixes are needed. Every prefix merges with every base account for both types of accounts.

      Note: Generate Accounts never forms any prefixes by itself.
Examples:

Example 1:

Account format: (ABC) x-xx-xx-xxxx
Balance sheet level: A, Fiscal Entity Level: A, B, C
Account Configurations: Prefix A=9, Prefix B=9-10, Balance sheet prefix=9-00 and so on...
Result: 9-00-00-1111 for Current assets, 9-10-10-4444 for Income.
If prefix 9-00-00 wasn't set, account 9-00-00-1111 wouldn't form. An error message shows after the program and logs the error.

Example 2:

Account format, levels, and configurations follow a similar structure but different values.
Result: 9-10-00-1111 for Current Assets, 9-10-10-4444 for Income.
Example 3:
This format follows the same structure as the previous examples, showcasing the outputs for different configurations.

Example 4:

Account format: (AB) x-xx-xxxx
Results demonstrate the relationship between prefixes, base accounts, and account types, with emphasis on the importance of setting up prefixes correctly.
Example 5 & 6:
These examples continue to explore the relationship and effects of different configurations on account generation.

By understanding these specifics and examples, users can efficiently manage and generate accounts in the General Ledger.