InventoryFLOW OF ACCOUNTING ENTRIES(This is not an exhaustive
document)Sr.No.TransactionAccounting EntriesAt what valueAve.Cost
Updated1Receipt of MaterialDr. Receiving Inventory A/c.PO Rate *
QtyNoDr. Receiving Inventory A/c.Excise Duty Amt.Dr. Receiving
Inventory A/c.Cess Amt.Dr. Receiving Inventory A/c.S&HE Cess
Amt.Dr. Vat Interim Receivable A/c.Vat Amt.Cr. AP Accrual
A/c.Rate*Qty+All Taxes2PO InspectionNo Entries3On Claiming
CENVATDr. Cenvat Receivable A/c.Exicise DutyDr. Cess On Cenvat
Receivable A/c.CessDr. S&HE Cess On Cenvat Rece. A/c.S&HE
CessCr. Receiving Inventory A/c.Total Of Above4Material Delivery to
InventoryDr. Material Inventory A/c.PO Rate * QtyYesCr. Receiving
Inventory A/c.PO Rate * Qty5Claim VatDr. Vat Receivable A/c.Vat
Amt.Cr. Vat Interim Receivable A/c.Vat Amt.6Receipt of Vendor's
InvoiceDr. AP Accrual A/c.PO PriceCr. AP Liability A/c.Invoice
PriceCr./Dr.Invoice Price Varience A/c.(PO Price - Inv.
Price)7Return to Receiving Point from InventoryDr. Receiving
Inventory A/c.PO PriceYesCr. Inventory Valuation A/c.PO PriceCr.
Input Tax8Return to Vendor from Receiving PointDr. AP Accrual
A/c.PO PriceNoCr. Receiving Inventory A/c.PO Price9Payment Made to
VendorDr. AP Liability A/c.Amount PaidCr. Bank A/c.10Misc.
ReceiptDr. Inventory Valuation A/c.User Input ValueCr. User
Specified A/c.11Misc. IssueDr. User Specified A/c.User Input
ValueCr. Inventory Valuation A/c.12Inventory Adjustment
(Physical/Cycle Count)Dr./Cr. Inventory Valuation A/c.Cr./Dr.
Inventory Adjustment A/c.13Issue to Job from InventoryDr. WIP
Inventory A/c.Cr. Inventory Valuation A/c.14Component Return to
InventoryDr. Inventory Valuation A/c.Cr. WIP Inventory A/c.15Charge
Labour Resource to JobDr. WIP Resource A/c.Cr. Resource Absorption
A/c.16Charge Non Labour Resource to JobDr. WIP Resource A/c.Cr.
Resource Absorption A/c.17Charge Overhead to JobDr. WIP Overhead
A/c.Cr. Overhead Absorption A/c.18Charge OSP Charges to JobDr. WIP
OSP Charges A/c.Cr. OSP Absorption A/c.15Completion of JobDr.
Inventory Valuation A/c.Cr. WIP Inventory A/c.Cr. WIP Resource
A/c.Cr. WIP Overhead A/c.Cr. WIP OSP Charges A/c.16Completed Job
Return to Shop FloorDr. WIP Inventory A/c.Dr. WIP Resource A/c.Dr.
Overhead Absorption A/c.Dr. WIP OSP Charges A/c.Cr. Inventory
Valuation A/c.17Scrap of Job From Shop floorDr. Scrap A/c.Cr. WIP
Inventory A/c.Cr. WIP Resource A/c.Cr. WIP Overhead A/c.Cr. WIP OSP
Charges A/c.18Sales oreder ShipmentDr. Cost Of Goods Sold A/c.Cr.
Inventory Valuation A/c.19Return From Customer (RMA)Dr. Inventory
Valuation A/c.Cr. Cost Of Goods Sold A/c.20Invoice Raised on
CustomerDr. Receivables A/cCr. Revenue A/c.21Payment Received From
CustomerDr. Bank A/c.Cr. Receivable A/c.
Procure to PayProcure to Pay CycleFLOW OF ACCOUNTING
ENTRIESSr.No.TransactionAccounting EntriesAt what value1Receipt of
MaterialDr. Receiving Inventory A/c.PO Rate * QtyDr. Receiving
Inventory A/c.Excise Duty Amt.Dr. Receiving Inventory A/c.Cess
Amt.Dr. Receiving Inventory A/c.S&HE Cess Amt.Dr. Vat Interim
Receivable A/c.Vat Amt.Cr. AP Accrual A/c.Rate*Qty+All Taxes2PO
InspectionNo Entries3On Claiming CENVATDr. Cenvat Receivable
A/c.Exicise DutyDr. Cess On Cenvat Receivable A/c.CessDr. S&HE
Cess On Cenvat Rece. A/c.S&HE CessCr. Receiving Inventory
A/c.Total Of Above4Material Delivery to InventoryDr. Material
Inventory A/c.PO Rate * QtyCr. Receiving Inventory A/c.PO Rate *
Qty5Claim VatDr. Vat Receivable A/c.Vat Amt.Cr. Vat Interim
Receivable A/c.Vat Amt.6Receipt of Vendor's InvoiceDr. AP Accrual
A/c.PO PriceCr. AP Liability A/c.Invoice PriceCr./Dr.Invoice Price
Varience A/c.(PO Price - Inv. Price)7Payment Made to VendorDr. AP
Liability A/c.Amount PaidCr. Bank A/c.