Inventory AP Accrual Account

[anu_uma]

HI Experts,

I have a doubt see there is an account called Inventory AP Accrual Account... This account always has to be zero or it can have credit balance, but i have more than one crore Rs. in debit balance.
when this account can have debit balances
On what condition this can have the debit balances????

[Dhananjay]

Hi Uma

Let me first clarify that I am not an expert, but I would like to try to answer your question.......

Debit Blance in Inventory AP Accrual account will be when you have booked supplier's Invoice but material is not receipted. e.g. You have received supplier invoice by courier, you have booked the same but actually material is yet to be received. OR truck is waiting outside the gate of factory, driver approached with the copy of the Invoice, this Invoice got booked but material not yet receipted.

Credit balance in the Inventory AP Accrual account indicates that you have made receipt but not invoiced the same. If material is receipted and supplier invoice is not booked in this case there will be credit balance in your AP Accrual A/c.

In normal case when we make material receipt accounting entry will be :
Inventory Receiving A/c Dr.
AP Accrual A/c Cr.

And when we book the Invoice :

AP Accrual A/c Dr.
AP Liability A/c Cr.

Hope I am correct in answering your question......

Thanks & Regards
Dhananjay

[anu_uma]

Hi Dhananjay,
U r correct with your explanations,

When we transferred the purchasing module, the problem was solved...

what ever we received in purchasing module was not transferred to GL, after ac accruall a/c got a credit balance

Uma