Please read the basic concepts of payment terms, Invocing with rules and accounting rules @
http://www.oracleug.com/node/9

1. Creating an Invoice for Revenue Recognition

To make an invoice eligible for revenue reorganization, set the invoicing rule and accounting rule while creating the invoice The Invoicing rule provided tells Revenue Recognition how you want it to create the distributions for the Receivable account.

You set the accounting rule in the lines of the invoice, where you also provide duration & rule start date information to make the system create the distributions for the Revenue account.
After you finish creating and completing an invoice, records are created in RA_CUST_TRX_LINE_GL_DIST_ALL that provide a template or model for the Revenue Recognition engine to use.

After the invoice is completed, you will need to run Revenue Recognition so it can create the necessary distributions. There are many different  ways to run Revenue Recognition:

2. Run Revenue Recognition
Run the Revenue Recognition program to generate the revenue distribution records for your invoices and credit memos that use Invoicing and Accounting Rules. You assign accounting rules to recognize revenue over several accounting periods. The Revenue Recognition program will create distribution records for the invoices and credit memos that you create in Receivables and import using AutoInvoice.

2.1 Standalone process in batch mode.
This standalone method provides users the ability to run Revenue Recognition at any given time.

Responsibility: Receivables Manager
Navigation: Control > Accounting > Revenue Recognition

The Revenue Recognition Master Program is capable of running the process using multiple workers. This feature is useful when processing large volumes of data. Invoices pending Revenue Recognition are stored in a queue: AR_REV_REC_Q. Records from this queue are removed once they have been processed by the Master program.

The Revenue Recognition program uses the accounting distribution sets  that you specify in the Transactions window or import into Receivables using AutoInvoice to determine the accounts of your newly created revenue distribution records.

There are two Revenue Recognition programs: Revenue Recognition and Revenue Recognition Master. The Revenue Recognition Master program is for parallel processing only and takes advantage of the Oracle scalability feature to reduce processing time by running on multiple processors, or workers. The Revenue Recognition Master program determines the maximum number of parallel processors needed for your transaction volume and uniformly distributes the processing over these workers. You can set a maximum number of processors for the Revenue Recognition Master program to use at runtime. This scheduling capability allows you to take advantage of off–peak processing time. You choose the Revenue Recognition program that you want to use at runtime.

When you submit the program, Revenue Recognition selects all transactions that have invoicing and accounting rules and that have not yet been processed since you last submitted the program. The program creates the revenue distribution records for all accounting periods specified by the accounting rule on each transaction line. If a deferred accounting rule exists, then Revenue Recognition will create the distribution records for an unearned revenue account.

Revenue Recognition also creates the receivable, tax, freight, and AutoInvoice clearing account assignments which correspond to the GL date of each invoice included in your submission.

If you later decide that the GL distributions need to be reclassified, you can change the individual distribution on the transaction. Receivables will automatically create the reverse accounting entries. If the GL date for a transaction is in a period that has a status of either Closed or Close Pending, Revenue Recognition changes the revenue GL date to the first subsequent period that has a status of Open, Future, or Not Open. If the GL date for a transaction is in a period that has a status of Open, Future, or Not Open, Revenue Recognition creates the revenue in the accounting period specified by the accounting rule.

2.2 Online in Transactions form

Available only in Release 12, in the Transactions form, you can invoke the creation of accounting for a specific invoice.

Responsibility: Receivables Manager
Navigation: Transactions > Transactions

After completing an invoice, or after querying a completed invoice, access from the Toolbar: Menu > Create Accounting.

2.3 Implicitly via the transfer to General Ledger

Since Revenue Recognition creates the GL distributions necessary for posting, the process that transfers to the General Ledger will invoke Revenue Recognition to ensure that all necessary distributions exist before attempting to post. This process has changed between Release 11.5 and 12.

In Release 11.5:
Responsibility: Receivables Manager
Navigation: Interfaces > General Ledger

In Release 11.5, when running the General Ledger Transfer process

• You can not disable the call to Revenue Recognition
• The Revenue Recognition execution report is always submitted in Detailed mode

2.4 Submit Accounting
In Release 12.0:
Responsibility: Receivables Manager
Navigation: Control > Requests > Run

Run the request for: Submit Accounting, and provide the parameters requested

Submit accounting is different from Create Accounting,. Create accounting never calls Revenue Recognition. If you use this process, there is a likelihood that you will not post everything from Receivables if there are invoices still pending to be processed by Revenue Recognition.

You are advised to use Submit Accounting which was created specifically for Oracle Receivables. This process calls: Revenue Recognition prior to calling Create Accounting. This ensures the necessary GL distributions are created by Revenue Recognition.
 

In Release 12.0, when running Submit Accounting

• You cannot disable the call to Revenue Recognition
• The Revenue Recognition execution report is always submitted in Summary mode