Purchasing Account Resolution

A/P

(A/P Trade)

Purchasing - A/P Reconciliation

This accounts payable account is used for purchase orders or other supplier charges. It posts during accounts payable reconciliation.

A/P Reconciliation Posting: A/P (Cr) = A/P Clearing (Dr).

A/P Clearing

PO Receipts

This accounts payable clearing account is used for purchase orders or other supplier charges. It posts during the receiving process and represents the total receipt cost.

PO Receipt Posting: Inventory (Dr) + PO Charges (Dr) = A/P Clearing (Cr) + Standard Cost Variance (Dr) [If using Standard cost method].

Charge Offset

PO Receipts

This account is used instead of the A/P Clearing account for additional purchase order charges if None is selected as the Supplier Type for the charge in Purchase Additional Charge Maintenance. For example this account may be used for labor charges or repackaging costs that might be added to the value of inventory.

PO Receipt Posting: PO Charge (Dr) = PO Charge Offset (Cr).

Transfer Buy

Transfer Receipts

This account is used for the cost of products shipped in a transfer. This is the amount that is received in a location. It posts during the receiving process. For more information, see Order Entry System Overview.

PO Transfers Receipt Posting: Inventory (Dr) = Transfer Buy (Cr) + Transfer Expense (Dr).

Inventory

Transfer Receipts and PO Receipts

This account is used for the total cost of received items. It represents the increase in the value of inventory.

PO Receipt Posting: Inventory (Dr)+ PO Charges (Dr) = A/P Clearing (Cr) + Standard Cost Variance (Dr) [If using Standard cost].

PO Transfers Receipt Posting: Inventory (Dr) = Transfer Buy (Cr) + Transfer Expense (Dr).

PO Charge

Purchasing

This account is used for the amount of purchase order additional charges that are not allocated into the cost of products (charges for which the Include in Landed Cost check box is cleared in Purchase Additional Charge Maintenance).

PO Posting: A/P Clearing (Cr) + Charge Offset (Cr) (depending on the charge's supplier type) => PO Charge (Dr) + Inventory (Dr).

Standard Cost Variance

Transfer Receipts and PO Receipts

This account is used for the difference between the total receipt cost and the total standard cost of received items. The total standard cost is a debit against inventory. The total receipt cost is a credit against the accounts payable clearing account.

Standard Cost Variance Posting: Inventory (Dr) + PO Charges (Dr) = A/P Clearing (Cr) + Standard Cost Variance (Dr). [Only if the costing method is Standard].

Transfer Expense

Transfer Receipts

This account is used for the difference between the total cost of the items shipped, and the total cost of the items received (this could be different if items were lost or damaged in transit). It posts during the receiving process.

PO Transfers Receipt Posting: Transfer Buy (Cr) = Inventory (Dr) + Transfer Expense (Dr).

Pre-payment

Purchasing - A/P Reconciliation

This account is used when a purchase order is pre-paid. It posts against accounts payable.

A/P Reconciliation Posting: Pre-Payment (Dr) = A/P [A/P Trade] (Cr).

Inbound

Purchasing - A/P Reconciliation

An inbound account is used when an accounts payable invoice is received prior to the receipt of the goods.

Voucher Entry Posting: Inbound (Dr) = A/P [A/P Trade] (Cr).

Final A/P Reconciliation: Inbound (Cr)= A/P Clearing (Dr).

A/P Inventory Reconciliation

A/P Reconciliation

This account is used for item variance between the receipt cost and the accounts payable amount.

A/P Reconciliation Posting: A/P Inventory Reconciliation (Dr) + A/P Clearing (Dr) = A/P [A/P Trade] (Cr).

A/P Charge Reconciliation

A/P Reconciliation

This account is used for charge variance between the receipt cost and the accounts payable invoice amount of purchase order additional charges, which are not allocated into the cost of the products (charges for which the Include in Landed Cost check box is cleared in Purchase Additional Charge Maintenance).

A/P Reconciliation Posting : A/P Charge Reconciliation (Dr) + A/P Clearing (Dr)= A/P [A/P Trade] (Cr).

Drop Ship Cost of Goods Sold

Invoice Post

This is the expense account that goes against A/P Trade when a drop-ship invoice is input for the supplier. If standard costs are being used, any variance between the standard cost and the drop-ship cost goes into the standard cost variance account. If you are not using standard costing, use a specific cost of goods sold account for drop shipments only. 

Invoice Posting: Drop Ship Cost of Goods Sold (Dr) = Drop Ship In Transit (Cr).

Drop Ship In Transit

Accounts Payable Post

Invoice Post

This account is used to track cost of goods sold for drop-ship purchase orders for the time between when the order is vouchered and the customer invoice is created.

A/P Reconciliation Posting: Drop Ship In Transit (Dr) = A/P [A/P Trade] (Cr).

Invoice Posting: Drop Ship Cost of Goods Sold (Dr) = Drop Ship In Transit (Cr).