Journal Entries Generated by Posting or Day-End Processing
This article describes the journal entries that are created for your general ledger when you post transactions or run day-end processing (depending on when you do item costing). More...
If your Inventory Control ledger is not set to generate general ledger batches during posting or day-end processing, make sure you create General Ledger batches as part of your period-end procedures.
If you do not use Sage 300 General Ledger, Inventory Control creates its general ledger transactions in a file called ICGLTRAN.CSV, which can be imported by a Sage 300 General Ledger at another site or transferred to another general ledger that you use. The file is in a Comma Separated Values (CSV) format.
Note: Inventory Control does not create invoices for Accounts Payable and Accounts Receivable. If you want to generate invoices with your Inventory Control receipts and shipments, you must use Purchase Orders and Order Entry.
Types of Journal Entries
The following types of journal entries may be created for your general ledger:
- Receipts. Receipt transactions debit the general ledger inventory control account, and credit the item's payables clearing account. More...
When you enter the related vendor invoices in Accounts Payable, you will debit the payables clearing account for the value of the invoice, and credit the vendor's payables account. The debit to the payables clearing account clears the balance that is left in this account from posting receipts.
If you do not enter a vendor invoice in Accounts Payable (such as when no vendor is specified on the posted receipt), you enter a cash transaction in the General Ledger that debits the payables clearing account for the cost of the goods on the receipt, and credits the cash account. The debit to the payables clearing account clears the balance that is left in this account from posting receipts.
- Receipt returns. Returns posted to incomplete receipts debit the payables clearing account and credit the inventory control account.
- Shipments. Shipment transactions debit the item's cost of goods sold account, and credit the general ledger inventory control account. More...
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.
When you enter the related customer invoices in Accounts Receivable, you must credit the sales accounts and the necessary tax accounts, and debit your customer accounts.
- Sales returns. Sales returns debit the inventory control account and credit the cost of goods sold account.
- Non-stock shipments. Non-stock shipments debit the cost of goods sold account and credit the non-stock clearing account.
- Adjustments. The journal entries that are created vary depending on the type of adjustment. More...
- An adjustment cost increase debits the inventory control account and credits the adjustment write-off account you specify when you enter the adjustment.
- An adjustment cost decrease credits the inventory control account and debits the adjustment write-off account you specify when you enter the adjustment.
- Quantity adjustments do not create journal entries.
- Transfers. Stock transfer transactions both debit and credit the inventory control account specified in the item's account set, although you can set up location records in Inventory Control to override general ledger account segments that appear in the item's inventory control account. More...
Here is an example to show how you might override account segments:
An item's general ledger inventory control account is 1300-00, where the second segment is the location segment. You set up location1 and location2 to override the location segment of the account with 01 and 02, respectively.
If you transfer an item from location1 to location2, the program credits account 1300-01 and debits account 1300-02.
Stock transfers debit the inventory control account for the original location and credit the inventory control account for the new location.
- Assemblies. Assembly transactions debit the master item's inventory control account, and credit the inventory control account of each component item on the bill of material being assembled. If a fixed or variable cost is specified on the bill of material, then the master item's assembly cost credit account is credited.
Journal Entry Source Codes
Each type of journal entry has a source code which is used on the G/L Transactions report. The following table lists these source codes:
| Receipts |
IC-RC |
| Receipt returns |
IC-RR |
| Receipt adjustments |
IC-RA |
| Shipments |
IC-SH |
| Sales returns |
IC-SR |
| Adjustments |
IC-AD |
| Transfers |
IC-TF |
| Assemblies |
IC-AS |
For more information about the G/L Transactions report, see the General Ledger help.