Delivery From Receiving Inspection to Inventory
You can use the Receiving Transactions window to move material from receiving inspection to inventory. The system uses the quantity and the purchase order price of the delivered item to update the receiving inspection account and quantity. The system uses the standard cost of the delivered item to update the subinventory balances.
| Subinventory accounts @ standard cost
| XX
|
|
| Receiving Inspection account @ PO price
|
| XX
|
| Debit/Credit Purchase Price Variance
|
|
|
If your item has material overhead associated with it, the subinventory account is debited for the amount of the material overhead and the material overhead absorption account(s) are credited.
The absorption account for Material Overhead is defined in the Overheads window. See: Defining Overhead.
| Subinventory account
| XX
|
|
| Material Overhead Absorption account
|
| XX
|
The other 4 accounts are also credited.
Attention: The subinventory account is combined with the above entry. The material overhead absorption account adds one additional entry. Under cost subelements you can set up an absorption.
Foreign Currencies
If the purchase order uses a foreign currency, the purchase order price is converted to the functional currency and this converted value is used for accounting purposes.
Purchase Price Variance (PPV)
Purchase price variances (PPV) occur when there are differences between the standard cost and the purchase order cost of an item.
Expense Subinventories and Expense Items
When you receive inventory expense items into expense subinventory locations, the following accounting entry is generated:
| Subinventory Expense account @ PO price
| XX
|
|
| Inventory A/P Accrual account @ PO price
|
| XX
|
When you receive an expense (non-asset) inventory item, or into an expense subinventory, the subinventory expense account instead of the valuation account is debited. Because the expense account is debited at the purchase order price, there is no purchase price variance.
See Also
Inventory Standard Cost Variances
Organization Parameters Window
