Account entries generated in PO receipt transaction

Pre-Requisite Setup Required Create below Items as Buy Item and setup the unit cost in costing module with cost type as Pending Run Update standard cost to freeze the cost Check Create Debit memo for RTS transaction for the supplier (Nav: Supply Base>Supplier>Purchasing

Create PO for the below items

Setup the shipment for each line. Navigate to Shipments/Receiving Controls Set delivery as Direct Delivery for 1st & 2nd line. Set Delivery as Standard Delivery for 3rd line.

Navigate to Receiving/Receipt and query the PO#, the transaction types for first 2 lines creates both receiving & Inventory destination type since the delivery type is Direct Delivery For last line only one destination type Receiving gets created since the delivery type is Standard Delivery .

Select View Accounting from Tools to view the account entries in receipt transaction.

Navigate to View receiving transaction/T Accounts to view for receiving destination type Material Inspection Account - Dr Accounts Payable Clearing -Cr

Navigate to material transaction to view for Inventory destination type transaction

Once the material is received from Main Inventory Org to Sub inventory, the account entries generated in Inventory Modules are, Inv Valuation accnt- Dr Purchase Price Variance accnt- Dr ( Since the PO price is $12 and standard cost of item is $10, for 500 Ltr of milk the variance recorded is $2*500=$1000 Material Inspection Accnt-Cr ( The $6000 Dr in PO receipt gets distributed for above accnts, -ve accnt entries will get nullify the material inspection accnt) Inventory account entries for Sugar & Cocoa Inv Valuation accnt- Dr Material Inspection accnt- Cr Note: Since the PO price and standard cost is same, no purchase price variance is created.

Account entries for Return to Supplier Transaction (RTS) Return 50 ltr of Milk to supplier, now 2 lines will get generated for Inventory & Receiving destination type. For Receiving Destination Type Navigate to View receiving transaction/T Accounts to view for receiving destination type for RTS transaction Material Inspection Account - Cr Accounts Payable Clearing -Dr

As we observe when we receipt the 500 ltrs, the account payable account credited for 6000$ & Inventory accnt got debited for 6000$, since we are returning 50ltrs, $12*50=$600 is getting reversed for the first transaction as shown above. For Inventory Destination Type Navigate to material transaction to view for Inventory destination type transaction. Material Inspection Accnt- Dr Inventory Val Accnt- Cr Purchase Price variance- Cr Note: Since the transaction is reverse to receiving the material, the account entries gets reversed compared to entries generated at the receipt of PO for Inventory transaction type.

Make payment for supplier, generate Invoice and match for PO for 450ltr of milk. The account entries generated for the invoice matching are as follows, Account Payables accnt- Cr Account payables clearing accnt- dr (This accnt gets nullify by debiting, as this accnt was credited at the receipt)

Account entries generated in WIP transaction

Create Discrete Job for the assembly Caramilk

In this case, since component inventory exist in Stores sub inventory, change the supply Inventory to stores from default sub inventory.

Complete the 1 qty & reject rest

Now check the account entries for the above scenario

WIP / Discrete / WIP Value Summary

Material Cost: Milk: Qty/Asy=10, Unit Cost=10, Tot=100 Sugar: Qty/Asy=5 Unit Cost=10, Tot=50 Cocoa: Qty/Asy=4, Unit Cost=25, Tot=100

Material Cost Incurred is 250$, since the unit qty of Job is completed the cost is relieved from WIP valuation and added to Inv Valuation account (since the finished good on hand inventory increased by unit qty) Resource Cost: Resource Cost to complete Op Seq 10=10Hr, Rate=$20/Hr, Tot=200$ Resource Cost to complete Op Seq 20=1Hr, Rate=$50/Hr, Tot=50$ Total Resource cost=450$ 1081098 Since unit qty of Job completed the resource cost relieved is 250$, and net activity cost is 200$ incurred nd for operation 10 for 2 component. Now scrap the 2nd job which was rejected at op seq 10 and view the WIP value summary for the scrap.