Example of Accounting of In Transit Transfer Order Shipment with Cost Propagation
This example illustrates:
-
Material moment transactions that are captured in Oracle Inventory Management and interfaced to Oracle Receipt Accounting and Oracle Cost Accounting.
-
Accounting entries that Receipt Accounting and Cost Accounting generate for an in transit transfer order shipment to an inventory destination with manual receipt.
Scenario
Let's consider an in transit transfer order shipment from an inventory to an inventory destination within an organization. The quantity of goods transferred is 10 units and the cost per unit is $12.00. There's a subsequent cost adjustment of $3.00 per unit. The Actual cost method is used and Cost Propagation is enabled in the cost profile.
Accounting Events
For this in transit transfer to inventory destination, the corresponding events along with the transaction creating system and subledger are summarized in this table.
|
Event |
Transaction Creating System |
Subledger |
|---|---|---|
|
Miscellaneous Receipt |
Inventory |
Cost Accounting |
|
Transfer Order IntraOrg Shipment |
Inventory |
Cost Accounting |
|
Transfer Order Receipt |
Receiving |
Receipt Accounting |
|
Transfer Order IntraOrg Receipt |
Receiving |
Receipt Accounting |
|
Receipt Cost Adjustment |
Cost Accounting |
Cost Accounting |
|
Propagation Cost Adjustment |
Cost Accounting |
Cost Accounting |
Analysis
Receipt Accounting and Cost Accounting create accounting entries for the transfer of goods.
Accounting Entries
This table describes the receipt and cost accounting entries for the in transit transfer order.
|
Subledger |
Event |
Inventory Org/VU |
Accounting Line |
Cost Element |
Amount in USD (+Dr/-Cr) |
Basis of Amount |
|---|---|---|---|---|---|---|
|
Cost Accounting |
Miscellaneous Receipt |
Subinventory 1 |
Inventory |
Material |
+ 120.00 |
Transaction Cost |
|
Cost Accounting |
Miscellaneous Receipt |
Subinventory 1 |
Offset |
Material |
- 120.00 |
Transaction Cost |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Trade in Transit |
Material |
+ 120.00 |
Current Item Cost |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Inventory |
Material |
- 120.00 |
Current Item Cost |
|
Receipt Accounting |
Transfer Order Receipt |
Subinventory 2 |
Receiving Inspection |
+ 120.00 |
Transfer Price |
|
|
Receipt Accounting |
Transfer Order Receipt |
Subinventory 2 |
Trade in Transit |
- 120.00 |
Transfer Price |
|
|
Cost Accounting |
Transfer Order IntraOrg Receipt |
Subinventory 2 |
Inventory |
+ 120.00 |
Transfer Price |
|
|
Cost Accounting |
Transfer Order IntraOrg Receipt |
Subinventory 2 |
Receiving Inspection |
- 120.00 |
Transfer Price |
|
|
Cost Accounting |
Receipt Cost Adjustment |
Subinventory 1 |
Inventory |
Material |
+ 30.00 |
Cost Adjustment |
|
Cost Accounting |
Receipt Cost Adjustment |
Subinventory 1 |
Offset |
Material |
- 30.00 |
Cost Adjustment |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Trade in Transit |
Material |
+ 30.00 |
Propagated Cost Adjustment |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Inventory |
Material |
- 30.00 |
Propagated Cost Adjustment |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Offset |
Material |
+ 30.00 |
Propagated Cost Adjustment |
|
Cost Accounting |
Transfer Order IntraOrg Shipment |
Subinventory 1 |
Trade in Transit |
Material |
- 30.00 |
Propagated Cost Adjustment |
|
Cost Accounting |
Propagation Cost Adjustment |
Subinventory 2 |
Inventory |
+ 30.00 |
Propagated Cost Adjustment |
|
|
Cost Accounting |
Propagation Cost Adjustment |
Subinventory 2 |
Offset |
- 30.00 |
Propagated Cost Adjustment |