Understanding Journal Entry Review for Receipt Transactions
The system creates journal entries each time you enter or reverse a receipt. You can review the journal entries for accuracy and then post them to the general ledger.
When you enter a formal receipt, the system creates journal entries that:
Debit an inventory account if it is a stocked line, otherwise debit the general ledger account.
Credit a received not vouchered account.
The system retrieves account numbers for which to create journal entries from AAIs. A separate AAI table exists for inventory accounts and received not vouchered accounts. The system retrieves an account number from each table based on the company, business unit, and general ledger category code that applies to a receipt.
For example, you enter a receipt for 100.00 worth of inventory items. The items have a general ledger category code of IN20 and were purchased for business unit A in company 100. When you enter a receipt, the system retrieves the inventory account number and the received not vouchered account number for company 100, business unit A, and the IN20 general ledger category code to create the journal entries.
If you enter purchase order detail lines by account number, the system charges each receipt against the account number on the detail line. The system retrieves a received not vouchered account number from AAIs.
If tax is applicable to a receipt, the system also creates tax accrual entries. If you apply landed costs at the time of receipt, the system creates entries for accrued landed costs.
You might use a standard cost method to determine the inventory cost for an item. The standard cost for an item remains consistent unless you manually change it. If a variance exists between the standard cost and the price at which you purchase an item, the system creates journal entries to account for the variance. You specify variance accounts in AAIs.
You use processing options to specify whether the system creates separate journal entries for each detail line or summarizes the entries for all lines.
When you reverse a receipt, the system automatically reverses the corresponding journal entries.