Inventory - Purchase & Sales

Soulz

Hi,

When i purchase item, the accounts affected will be:
Dr Purchase
Cr AP/Bank
Dr Stock
Cr Direct cost/Purchase Clearing

Correct?

For selling of item, the accounts affected will be:
Dr AR
Cr Sales
Dr COGS
Cr Stock

Correct?
So when do we write off the direct cost/purchase clearing account? And also when do we write off COGS account?

Thanks!

veerabhadra

Hi.

Yes: ur G/L entries are correct.

But, there is no need to wrrite off Purchase Clearing/Direct Cost Applied A/c and COGS A/c., the reseans are...

1) Purchase Clearing/Direct Cost Applied A/c is an offset account
aginest Purchase A/c.

2) The balance of COGS A/c is charged to P&L statement while
preparing company financial statements.

i hope u will get some clarity in this regard.

Regards

Kowa

Stock accounts are only affected during purchase when "Automatic Cost Posting" is ticked in the "Inventory Setup", otherwise later when Report 1002 "Post Inventory Cost to G/L" is run. This report has to be run regulary even if "Automatic Cost Posting" is used.

Soulz

veerabhadra wrote:

Hi.

Yes: ur G/L entries are correct.

But, there is no need to wrrite off Purchase Clearing/Direct Cost Applied A/c and COGS A/c., the reseans are...

Regards

Thanks. That means purchase clearing a/c and COGS a/c are setup as income (income/balance) type rite?

So in my profit & loss statement, how does my COGS portion looks like? The figure will come directly from my COGS a/cs or it will be:

Opening stock
+ Purchases
- Closing stock
= COGS

If it is coming directly from my COGS a/cs, where do i show my purchase figures in my profit & loss a/c?

Alex_Chow

Soulz wrote:

veerabhadra wrote:

Hi.

Yes: ur G/L entries are correct.

But, there is no need to wrrite off Purchase Clearing/Direct Cost Applied A/c and COGS A/c., the reseans are...

Regards

Thanks. That means purchase clearing a/c and COGS a/c are setup as income (income/balance) type rite?

So in my profit & loss statement, how does my COGS portion looks like? The figure will come directly from my COGS a/cs or it will be:

Opening stock
+ Purchases
- Closing stock
= COGS

If it is coming directly from my COGS a/cs, where do i show my purchase figures in my profit & loss a/c?

You show your purchases from the Purchase account. The Purchase account is usually setup in the COGS section.

This is the classic way CPAs (in the US at least) like to display their financials. If you setup your financial statements this way, the COGS is usually calculated when the Account Schedule is setup.

veerabhadra

Hi

Yes, u need to create Purchase Clearing A/c & COGS A/c as Income Statement accounts.

A sequential G/L work flow was involved through integration with other modules to generate figures in COGS A/c. General Business Posting groups & Product posting groups and Inventory batch jobs are the key integrated links to achive this G/L flow.

Refer to "Inventory Costing & Manufacturing Costing" training materials for better understanding over cost flows and G/L work flow in Navision.

Regards
Veeru

Soulz

deadlizard wrote:

You show your purchases from the Purchase account. The Purchase account is usually setup in the COGS section.

This is the classic way CPAs (in the US at least) like to display their financials. If you setup your financial statements this way, the COGS is usually calculated when the Account Schedule is setup.

Hi, so does that means in my profit & loss a/c - COGS portion, i show only COGS a/cs from my chart of accounts?

I understand most CPAs will like to know their opening stock, closing stock and purchases in their COGS portion. If i setup my P/L a/c - COGS with only COGS a/cs, will it be alright? Because it is not showing my purchase figure inside the COGS and i m not sure where i can get my opening and closing stock figures.

Thanks!

Alex_Chow

No, in your case, you wouldn't show the COGS account on your financial statement.

Your COGS will be calculated using formulas. What you get for COGS should be equal to the COGS account on your Chart of Accounts.

Soulz

deadlizard wrote:

No, in your case, you wouldn't show the COGS account on your financial statement.

Your COGS will be calculated using formulas. What you get for COGS should be equal to the COGS account on your Chart of Accounts.

oh... hmm seems i done wrongly.
How do i calculated my COGS then? I only have my purchases figure. There is no opening stock or closing stock figure. Or am i suppose to have these 2 stock figures?

Thanks.

Kowa

Soulz wrote:

oh... hmm seems i done wrongly.
How do i calculated my COGS then? I only have my purchases figure. There is no opening stock or closing stock figure. Or am i suppose to have these 2 stock figures?
Thanks.

You can set a date filter on the account table. If all item movements have arrived on the stock account you can calculate the balance for any day you need.

Alex_Chow

When you're setting up your financial statements, you get Beginning Inventory by setting your account schedule to get the beginning balance under teh Calculate column.

The same goes for Ending Inventory. Just choose Ending Balance for the Calculate column.

Soulz

deadlizard wrote:

When you're setting up your financial statements, you get Beginning Inventory by setting your account schedule to get the beginning balance under teh Calculate column.

The same goes for Ending Inventory. Just choose Ending Balance for the Calculate column.

okie thks alot guys. My ending balance will be "balance at date" rite? Hopefully this will works. :P

Alex_Chow

No, your ending balance will be Ending Balance.

Soulz

deadlizard wrote:

No, your ending balance will be Ending Balance.

eh sorry... where is this Ending Balance? U are talking about "account schedule" --> "column layout" rite --> "column type" rite? If i specify Begining Balance here, all my accounts will be shown at starting date.Although i get my opening stock, my other account figures will be wrong. Or is it another place to choose this Ending Balance which i overlooked?

Alex_Chow

Soulz wrote:

deadlizard wrote:

No, your ending balance will be Ending Balance.

eh sorry... where is this Ending Balance? U are talking about "account schedule" --> "column layout" rite --> "column type" rite? If i specify Begining Balance here, all my accounts will be shown at starting date.Although i get my opening stock, my other account figures will be wrong. Or is it another place to choose this Ending Balance which i overlooked?

Actually, I'm talking about Account Schedule --> Calcuate column.

Soulz

deadlizard wrote:

Actually, I'm talking about Account Schedule --> Calcuate column.

Hmm.... Inside my account schedule --> column layout, i only have these columns:
1.Line no.
2.column no.
3.column header
4.column type
5.ledger entry type
6.amount type
7.include closing date
8.formula
9.show opposite sign
10.comparison date formula
11.comparison period formula
12.show
13.rounding factor

I cant find any "calculate" column. i am using navision 4.0 SP2 APAC version. Am i looking at the wrong place?

Alex_Chow

Oh..... :oops:

You know what, the Calculate column is a US localization thing. The field number in the US is 10029.

Are you a developer? Perhaps I can send you codeunit 8 for your reference?