Cost of Goods Sold Accoount is Greater than SALE Acccount

Silva

Hi,

Do you have any Idea how this happen? the COGS Account is Greater than SALES account. Any idea? Hoping for your reply.TY

Our Costing Method is FIFO

The Inventory Setup

Automatic Cost Posting := UNCHECK

Expected Cost Posting := UNCHECK

Automatic Cost Calc. Type := Never

Average Cost Calc. Type := Item

Ave. Cost PEriod := Day

Deep

Is it there for all the items, or some specific ones?
You should check whether there are any frequent positive/negative adjustments of inventory. Mismatched inventory adjustments(without exact cost reversals) can be the reason.
An uneven item charge assignment can also inflate the COGS.
Another reason may be that actually the goods have been sold at a price which is less that of the cost.

Alex_Chow

Drill down on your COGS account and find any wierd numbers, then Navigate on them to find the problem transactions.

muksha

It is better to make a report for analysing it precisely. On the basis of document no. please analyse only those items for which the COGS is coming higher than the revenue. There must be something positive adjustment/unexpected revaluation of inventory (due to human error).

Silva

Hi,

Thanks for the reply.I drill down the COGS account, and I saw some negative values, it is normal to have a Negative of Cost and that cost is from sales transaction? and the accounts is not diract posting, so no other transaction posted there.back to my question it is normal to have a negative values in the Cogs account. Hoping for your reply.

Thanks

Alex_Chow

Yes, it's common to have negative COGS when you have sales credit memos with items.

Silva

Hi,

I but it also came from SALES INVOICE transaction.I is still normal? hoping for your reply.


Thanks

Alex_Chow

Yes, it's normal. If you sold an item that is cheaper than what you received it as during the time of sale. NAV will adjust the lower cost to the COGS.