Sage 300 generates journal entries for your general ledger when you:
On the Order Entry G/L Transactions report, shipments are assigned source code OE-SH.
Item quantities are removed from Inventory Control for posted shipments (either during Day End Processing or when you use the I/C Create G/L Batch screen) as follows:
| G/L Account | Debit | Credit |
|---|---|---|
| Shipment Clearing | X | |
| Inventory Control | X |
On the Accounts Receivable G/L Transactions report, invoices are assigned source code OE-IN.
When you post an invoice, Sage 300 generates the following entries:
| G/L Account | Debit | Credit |
|---|---|---|
| Receivables Control | X | |
| Cost of Goods Sold (Item) | X | |
| Shipment Clearing | X | |
| Tax Liability | X | |
| Sales | X |
Costing methods. If an item's costing method is the standard method or the most recent cost method, the item's cost variance account is debited or credited with the difference between the standard or most recent cost and the weighted average cost of the items shipped.
Decreasing quantities shipped. If you decrease the quantity shipped on an invoice, Order Entry creates an entry to adjust Inventory Control when you run the I/C Day End Processing screen as follows:
| G/L Account | Debit | Credit |
|---|---|---|
| Inventory Control | X | |
| Shipment Clearing | X |
The source code that appears on the G/L Transactions report for this entry is OE-IN.
The detail lines that Order Entry creates in Accounts Receivable invoices vary depending on whether you use optional fields for detail lines .
Without optional fields. If you do not use optional fields in Order Entry invoice details and in Accounts Receivable invoice details, Order Entry creates Accounts Receivable invoices with separate detail lines for sales, cost of goods sold, and shipment clearing entries.
All Accounts Receivable invoice details are consolidated by general ledger account, so if you use only one sales account, one cost of goods sold account, and one clearing account, you will see only three lines on an invoice.
| Sales | Acct 4111 | 750.00 |
| Cost of Goods Sold | Acct 5200 | -500.00 |
| Shipment Clearing | Acct 5900 | 500.00 |
With optional fields. If you use optional fields in Order Entry invoice details and in Accounts Receivable invoice details, Order Entry creates a single Accounts Receivable invoice detail line for each Order Entry invoice detail line.
Each Accounts Receivable invoice detail includes the entries for the revenue, inventory (shipment clearing), and cost of goods sold accounts. There will be as many invoice detail lines as there were on the original Order Entry invoice. Accounts Receivable invoice details are not consolidated.
| Sales item 1 | Acct 4111 | 250.00 |
| Sales item 2 | Acct 4111 | 250.00 |
| Sales item 3 | Acct 4111 | 250.00 |
Each of the unconsolidated Accounts Receivable invoice lines will produce a journal entry with sales account, cost of goods sold account, and clearing account details when posted in Accounts Receivable.
On the G/L Transactions report, prepayments are assigned source code AR-PI.
Prepayments are added directly to Accounts Receivable receipt batches when you post an order, shipment, or invoice that has a prepayment. Prepayments debit the general ledger prepayment liability account and credit the customer's receivables control account.
Credit notes are assigned source code OE-CN on the Accounts Receivable G/L Transactions report.
Credit note transactions debit and credit general ledger accounts as shown in the following tables.
If an item's costing method is the standard method or the most recent cost method, then the item's cost variance account is debited or credited with the difference between the standard or most recent cost and the weighted average cost of the items shipped.
The following example records a credit note transaction for items returned to inventory. The first transaction is posted directly to General Ledger from Order Entry; the second one goes through Accounts Receivable.
| G/L Account | Debit | Credit |
|---|---|---|
| Inventory Control | X | |
| Credit/Debit Note Clearing | X |
| G/L Account | Debit | Credit |
|---|---|---|
| Sales Returns | X | |
| Credit/Debit Note Clearing | X | |
| Tax Liability | X | |
| Receivables Control | X | |
| Cost of Goods Sold | X |
The Damaged Goods account is debited rather than the Sales Returns account.
| G/L Account | Debit | Credit |
|---|---|---|
| Damaged Goods | X | |
| Credit/Debit Note Clearing | X* | |
| Tax Liability | X | |
| Receivables Control | X | |
| Cost of Goods Sold | X |
*The Credit/Debit Note Clearing and the COGS entries will always be zero for damaged goods.
This transaction will appear differently in the Accounts Receivable invoice depending on whether or not the transaction uses optional fields.
| G/L Account | Debit | Credit |
|---|---|---|
| Sales | X | |
| Tax Liability | X | |
| Receivables Control | X |
If you use optional fields with invoice details, Accounts Receivable invoices show only one detail line for each kitting item listed on an invoice, instead of showing one line for each component of each kitting item. Order Entry handles the accounting for kitting items with the following general ledger entries.
When you ship kitting items, Order Entry creates general ledger entries for each of the components in the kitting item:
| G/L Account | Debit | Credit |
|---|---|---|
| Shipment Clearing, component 1 | X | |
| Inventory Control | X | |
| Shipment Clearing, component 2 | X | |
| Inventory Control | X |
When you invoice a kitting item, Order Entry creates the following general ledger entries to back out the components for the master item from the shipment clearing account:
| G/L Account | Debit | Credit |
|---|---|---|
| Shipment Clearing, master item | X | |
| Shipment Clearing, component 1 | X | |
| Shipment Clearing, component 2 | X |
The source code that appears on the G/L Transactions report for the shipment entry is OE-SH. The source code that appears on the G/L Transactions report for the invoice entry is OE-IN.
Note: If you do not use optional fields in Order Entry invoice details and in Accounts Receivable invoice details, Order Entry creates shipment clearing lines on the Accounts Receivable invoice for each component, and does not create the general ledger entries shown above during invoicing.