on 03-29-2011 5:57 AM
Dear SAP guru,
In my company code purchase account have been activated.due to this two additional entries have been generated e.g purchase a/c dr and purchase offsetting a/c credit.
please tell me in which scenario this account should be acivated.
one major problem is coming during MIGO is that suppose if stock value is Rs 1000 and freight is Rs 300 and insurance is Rs 200 then following entry has passed.
Consumables a/c Dr. 1500
To purchase a/c . 1000
To GR/IR a/c 1000
To purchase offsetting a/c 1500
Freight clearing MM a/c Dr. 300
To freight clearing MM a/c 300
Insurance a/c Dr. 200
TO Insurance a/c 200
Please clearify me why purchase offseting a/c is debited with consumables value which is consist of all expenses. Is is correct? if not please suggest me what should be? and this is happening? is freight clearing mm entry is correct or not.
Note- Under OBYC it has been assigned G/L a/c of purchase and purchase offsetting a/c with its transaction key EKG & EIN respectively.
thanks in advance.
Hi
Check the below notes.
Indicator: Purchase Account Processing is Active
Specifies that purchase account management is active in the system.
Use
A purchase account is required in some countries. This account records the value at which externally obtained materials should be posted.
If purchase account management is active, additional postings are carried out during the posting of receipts of goods and invoices:
The same amount is posted to the purchase account as to the balance sheet account. The offsetting entry is made to the purchasing offsetting account.
A freight purchase account has been defined, analogous to the purchase account. It documents the posted delivery costs of externally obtained materials.
Srinivas
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hi Srinivas,
Many many thanks for your quick response. please tell me how purchase offsetting account will be nullify.all expenses are capitalized on purchase offseting a/c also . is this correct? our client is saying that both purchase and purchase offsetting account should be nullify at the end but there is some differences coming out.
best regard,
kalika
Hi,
The Purchase Accounts Posting System allows you to manage a company's budget and expenses. It is a sensitive definition in the sense that once it's activated and journal entries have been created it cannot be updated. Purchase accounts posting system has to be activated. Purchase accounts help you get the details of all the purchases made in a period, typically required to some legal reporting in these countries companies need to present a purchase ledger for statutory reporting. Purchase accounting is a legal requirement for Roman countries like Belgium, France, Portugal, spain. These countries need to present a purchase ledger for statutory reporting.In companies which manage a continuous stock system, it is now possible to use the Purchase Accounts Posting System. This option includes the recording of expense accounts in journal entries created automatically due to purchasing documents which affect the inventory valuation: A/P Invoice (not based on a Goods Receipt PO), A/P Credit Memo, Goods Receipt PO and Good Returns. Purchase accounting in SAP will not give desired results if sub contracting activities are involved. For settlements of subcontracting transactions, the system does not post to the purchase account nor to the purchase offsetting account.Purchase account: When an A/P invoice or a goods receipt PO is created; the purchase account is recorded in the journal entry along with the same amount that is recorded for the stock account.
Purchase return account: When a goods return or an A/P credit memo is created, this account is recorded in the journal entry along with the same amount that is recorded for the stock account.
Purchase offset account: This account is an offsetting account for purchase account or purchase return account.
Purchase accounts can be updated in the following ways:
At the receipt value: In this case, the exact amount posted at goods receipt to the GR/IR clearing account is posted to the purchase account. In Invoice Verification, the system only posts to the purchase account if there is a price difference. The system posts this difference to the stock account or to a price difference account, the sum of these two postings is posted to the purchase account.
At the stock value: In this case, the exact amount posted at goods receipt or at invoice receipt is posted to the purchase account. In Invoice Verification, the system only posts to the stock account u2013 and therefore to the purchase account and to the purchase offsetting account u2013 if the invoice item meets the following conditions:
A price variance has occurred
The material is subject to moving average price control
Stock exists for the material
Similar to the purchase account, a freight account exists for documenting delivery costs that have been posted for externally procured materials. If purchase account management is active, the system automatically carries out the additional postings.
Purchase order: 100 pieces material A at $10.00 /piece planned freight costs $200
Goods receipt: 100 pieces
Invoice: 100 pieces material A at $ 11 /piece plus freight costs ($ 1100 + $ 250 = $ 1350)
Goods receipt Invoice receipt
Stock account 1200 + 150 +
GR/IR clearing account 1000 - 1000 +
Freight clearing 200 - 200 +
Vendor account 1350 -
Purchase account 1000 + 100 +
Freight account (purchasing) 200 + 50 +
Purchase offsetting account 1200 - 150 u2013
Rgds
manish
Do not copy-paste
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