As you must be knowing, to create a refund in AR, you have to create a Receivable Activity. It is the GL account provided in this receivable activity which is used for refund accounting. Following are the accounting entries for refund in R12:
1) Unapply receipt from Invoice:
Receivables Dr
Unapplied Receipt Cr
2) Apply the receipt to Refund
Unapplied Receipt Dr
Refund Control A/c (Provided in receivable activity) Cr
3) Automatic creation of Invoice in Payables
Refund Control A/c Dr
Supplier Liability Cr
4) Payment of Invoice in Payables
Supplier Liability Dr
Bank Cr
At this point the AR Invoice is still open. The same can either be adjusted or set of against a credit memo, as when a CM is created from OM.
1) Unapply receipt from Invoice:
Receivables Dr
Unapplied Receipt Cr
2) Apply the receipt to Refund
Unapplied Receipt Dr
Refund Control A/c (Provided in receivable activity) Cr
3) Automatic creation of Invoice in Payables
Refund Control A/c Dr
Supplier Liability Cr
4) Payment of Invoice in Payables
Supplier Liability Dr
Bank Cr
At this point the AR Invoice is still open. The same can either be adjusted or set of against a credit memo, as when a CM is created from OM.
