Our client dont want to include Direct cost Applied and COGS accounts in Income Statement.
Up to this month Direct cost Applied Account is getting balanced with COGS since the purchases and sales are done in same month.
In this month they have done purchases in this month and want to do sales of the item in future month.In this situation the value is getting remained in Direct Cost Applied account and when they run the Income Statement and Balance Sheet reports they dont match to each other since the Income Statement dont include Direct Cost Applied Account.
Can any one please help in balancing the reports without including Direct Appllied Account.
Below is the general affect of accounts when Purchases and sales are done:-
When the purchase order is invoiced the Accounts affected are
4)Direct Cost Applied Account
When the Sales order is Posted the Accounts Affected are
When the Purchases and Sales are made in the same month the Direct Cost Applied account
gets balanced with COGS.
Where as in a situation where Purchases are done in one month and Sales are done in the other month the value will be remained in Direct Cost Applied account until sales are done for that item.