Understanding Journal Entry Creation for Items in Receipt Routes

You determine when the system creates journal entries for items in a receipt route so that the value of the item is reflected in the general ledger. The system automatically creates journal entries when you enter items at the operation at which they are eligible for payment and at the last operation in the route.

You can direct the system to create journal entries each time you transfer items to and from a certain operation in a receipt route so that the general ledger reflects the value of items at each operation. For example, you might want the general ledger to reflect the value of all items that are at the dock.

You must enter a general ledger category for each operation at which the system creates journal entries (unless the system creates entries at the last operation only). The general ledger category directs the system to retrieve an account number from the Routing Operation automatic accounting instruction (AAI) table for which to:

Debit the value of items that you transfer to the operation.
Credit the value of items that you transfer from the operation.

You can have the system create journal entries at an operation that precedes the payment-eligible operation. For example, you might want the general ledger to reflect the value of items at the dock even though you do not pay for the items until they are in stock. To account for items that are not yet payment-eligible, the system:

Debits a routing operation account (to reflect items at the operation).
Credits a prior to receipts/completions liability account (to reflect a preliminary liability for the items).

When you enter items at the payment-eligible operation, the system credits a received not vouchered account to reflect the liability. The system debits:

An inventory account (if the payment-eligible operation is also the last operation in the route and no prior journal entries exist).
A prior to receipts/completions liability account (if this account was credited prior to the payment-eligible operation).
A routing operation account (if the payment-eligible operation is the first operation at which the system creates journal entries).

When you enter items at the last operation in a receipt route, the system debits an inventory account to reflect the value of the items in stock. The system credits:

A received not voucher account (if the last operation is also the payment-eligible operation and no prior journal entries exist).
A routing operation account (if items were previously debited to another operation).

After you create a voucher for items in a receipt route, you cannot transfer the items back to an operation that precedes the payment-eligible operation. For example, a receipt route has a dock, inspection, and stock operation. Inspection is the operation at which items are payment-eligible. After you create a voucher, you cannot transfer the items back to the dock unless you reverse the voucher.

After you enter items in the operation at which they are eligible for payment, you can create a voucher to pay for the items. The system creates an offsetting entry for the received not vouchered account when you create a voucher. When you post that entry to the general ledger, the system credits the accounts payable trade account.