Hasan, you did not understand my question.
My question was centered around the "Accounting Period" in regards to which one a Prepayment can be made and during which one (accounting period) the Prepayment can be applied. Some accounting text books say if the Prepayment is made in accounting period 1, its application can only take place in period 2 or later, not in the same accounting period 1.
Your above explanation tells me that in Oracle, the Prepayment and the application of the Prepayment can take place as well as in the same accounting period, or at a later accounting period , but not as the Text Books restriction on the application of the Prepayment.