Inventory can be received into the system either on a purchase order or on a sales credit. The resulting journals are always in base currency.
Receiving inventory on a purchase order (PG)
Each time inventory is received on a purchase order, the items will be added into stock and an accounting journal will be created to increase assets.
Where multiple items are received at the same time, each goods-in row results in two journal rows as described above.
When inventory is received into stock, the opposite accounting entry is always made to the "Stock received not invoiced" code. This account is also used when the purchase invoice is received.
Once both the inventory and invoice have been received the "Stock received not invoiced" account will have a zero balance for the order.
If landed costs are allocated to purchased inventory before it's received into stock, the landed costs will be accounted for within the PG journal created at the point the items are received in.
Landed costs allocated after the items have been received into stock will be accounted for as an adjustment using journal type LC.
For more detail see accounting for landed costs.
Receiving inventory on a sales credit (SG)
Each time inventory is received on a sales credit (return), the items can be either:
- added back into stock
- placed into quarantine, or
- written off
In each case, the accounting for inventory will be automatically created. All return options will add the items back into stock and increase assets.
The write-off option will create a second journal to then remove the items from stock and decrease assets.
Writing inventory off
If items are received back on a sales credit and written off, the items are first added into stock (as above) and then an additional journal is created to account for the write off and removal from stock: