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Inventory GL Account
Case A: Raw Materials of Supplies
This account will be debited on receipt of an item. It is usually a Raw Material Inventory Asset or for consumables an Expense Account. The transaction on receipt is:
Inventory GL Account $XX.XX
AP Accruals $XX.XX
This account is used on all GL batches and for AP to reflect the inventory value. This account is always expressed in Home Currency.
Case B: Finished Goods (For Work Order Completion)
When a Work Order is completed this account for the parent item is debited and WIP is credited. An Example is shown for a parent with 2 child items
Inventory GL Account $XX.XX
WIP (Child 1) $XX.XX
WIP (Child 2) $XX.XX
Adjustment GLAccount
Default General Ledger Account to Debit When Adjusting an Item’s count or valuation. The transaction on adjustment is:
Expense Account Inv $XX.XX
Inventory GL Account $XX.XX
PPV GL Account
This is the Purchase Price Variance GL account. It is used to record the difference between the cost on the Purchase Order vs. the cost on the Vendor Invoice. For example, a PO lists an item at 1$, but the invoice from the vendor lists it as $1.25. The PPV will record $0.25
WIP Transfer GL Account
This is the “Work in Progress” GL account. When you transfer inventory to a Work Order this account is used. This is also where the raw materials are evaporated from when you complete the work order.
WIP Transfer GL Account $XX.XX
Inventory GL Account $XX.XX
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