INVENTORY ACCOUNTING

[zhondi]

Hello Gurus,

I have Oracle Purchasing, Oracle Payables, Oracle Inventory and Oracle GL installed for 11i.

My question is how to account the inventory in GL. Here are the steps i want you guys to clarify

1.When inventory bought thru payables invoice (Dr Inventory Asset Account e.g. Postage Stamps Cr Liability account.

2. Payment for the stock = (Dr Liability Account Cr Bank account)

Now when i have started using the stock i want the system to do the folowing;

1. Dr Cost of goods sold account Cr Inventory Asset Account (Postage Stamps) i.e. as there's a reduction in stock and so too will the balance sheet needs this reflection.

2. Can anyone please guide why when doing a miscellaneous receipt in inventory i only get to debit the material account and not being able to debit the actual asset accounts as i have many items in my stock and they all have their asset natural accounts and the same when doing a miscellaneous issue.

Pliz guide.

Zhondi.

[ahsan.global]

Zhondi.
You have multiple questions in one question.

1-Dr Cost of Good Sold A/c and Cr Inventory Assets A/c

Brother..if you charge all of your item issuance to Cost of Goods Sold Account, than how can you determined Material consumption.
It's not necessary that material consumed must be = Cost of Good Sold

So my suggestion is that you must Dr Inventory Consumption Account. Inventory A/c will auto Credited by the System.

2-Brother...when you receive items via Misc Receiving and Issuance form, you have to enter Credit Account only, Dr will be auto given to Inventory material A/c . It's default functionality.

[zhondi]

Hello Ahsan,

Thanks for your comments.

You see the company we have installed oracle inventory deals in finished products. So the process is like Buy from supplier then store the goods for re-sale.

So wot we expect is that when we buy from the suppliers different items for resale we debit the inventory asset accounts for each item (e.g. scratch cards,postage stamps etc )which all have got their own inventory asset accounts then we take the assets to the counter for sale we need to credit the inventory asset accounts and debit maybe the cost of goods sold account for each item.

Can you guide me on how i can achieve this as it seems each item as defined in the system in Inventory doesnt seem to affect their particular inventory asset accounts or is it that we did a wrong setup.

Regards,

Zhondi.