9.8.2. Topic: Transaction Accounting
This section is designed to illustrate the relationship between
xTuple ERP transactions and the General Ledger (G/L) Accounts they impact.
Think of this section as being a reference tool you can use to help you
track G/L transactions.
The transactions have been listed by Module—and only those
transactions which create G/L records have been included. For each
transaction, we have noted the G/L Accounts affected by the
transaction.
Tip
If you are not seeing G/L traffic for Inventory transactions, verify
that Standard Costs have been assigned to the affected Items. If no
Standard Costs are assigned, the costing aspects of the transactions will
not be recorded.
9.8.2.1. I/M Module Transactions
The majority of I/M Module transactions are initiated in the
Inventory Transaction section. This is the case with our first transaction
type: Miscellaneous Adjustment. You would enter a Miscellaneous Adjustment
to change the Quantity on Hand (QOH) for an Item in a particular Item
Site. Using a Miscellaneous Adjustment, QOH can be adjusted either upwards
or downwards:
If an Item is located in more than one Warehouse, you have the
option of moving quantities of the Item from one Warehouse to another.
During an Inter-Warehouse transfer, you increase QOH at the receiving
Warehouse and decrease QOH at the originating Warehouse.
Inventory may need to be scrapped for a variety of different
reasons. Entering a Scrap transaction decreases Inventory value by the
Cost of the quantity being scrapped. The following Accounts are
affected:
Expense transactions are like Scrap transactions, in that they
decrease Inventory value. The debit side of the transaction is assigned to
an Expense Category. The Accounts used for Expense Categories will vary
from site to site:
Items may be received into Inventory via a number of different
paths:
As a purchased Item from the P/O Module
As manufactured Item from the W/O Module
As a Credit Memo Item from the S/O Module
If none of these paths is being used, you may receive Inventory
using a miscellaneous Material Receipt. When an Item is received into
Inventory via a Material Receipt, the Inventory value of that Item is
increased:
The Transform utility enables you to transform quantities of a
source Item into quantities of a target Item. As far as the source Item is
concerned, its Inventory value is decreased. The reverse is true for the
Target Item, whose Inventory value is increased. The following Accounts
are affected:
To avoid the unnecessary confusion that can occur if negative QOH
balances are used for planning purposes, xTuple ERP gives you the ability to
reset negative QOH values to "0." Adjusting Inventory from a negative
value to "0" increases the value of the affected Inventory.
At the end of a physical Inventory count, the count totals are
posted using Count Tags. A posted Count Tag affects Inventory value in
either a positive or a negative sense, depending on whether counted QOH
was found to be greater than or less than recorded QOH. The Inventory
Asset Account will be adjusted accordingly:
9.8.2.2. P/D Module Transactions
Whenever the Standard Cost for an Item is updated, the G/L will
record the update. If Standard Cost is increased, the Inventory Asset will
be debited for the amount of the increase multiplied by the Quantity on
Hand for the Item in question. Both netable and non-netable quantities
will be included in the calculation. If the Standard Cost is decreased,
the opposite records will be generated, as shown below:
9.8.2.3. P/O Module Transactions
Note
When Purchase Orders are posted, no G/L record is created.
Instead, posting a Purchase Order makes it available to the S/R Module,
where purchased Items are received.
Some might expect the posting of a Voucher to be recorded as a P/O
Module transaction. However, the system gives ownership over Voucher
postings to the A/P Module. Similarly, the process of receiving a Purchase
Order Item is owned by the S/R Module.
One exception to the pattern of ownership involves the return of
Purchase Order Items. While purchased Items are returned using the S/R
Module, the system considers returns to be P/O Module transactions. As
shown below, the affected Accounts vary based on whether the return
involves an Inventory or a non-Inventory Item:
9.8.2.4. S/O Module Transactions
Note
No G/L records are generated when billing selections are posted.
Instead, the posting of billing selections creates an Invoice for the
Sales Order quantity in question.
While you might expect the posting of an Invoice to be recorded as
an S/O Module transaction, the system considers posted Invoices to be
owned by the A/R Module. The posting of S/O Credit Memos, however, is
owned by the S/O Module.
It can be a bit complicated to follow the transaction records for
posted S/O Credit Memos. The reason for this is that when a Credit Memo is
posted, a couple of different things happen. For one, the billing portion
is owned by the A/R Module. Second, the merchandise the Customer is
returning must be placed back into Inventory. It is the Inventory return
process which is owned by the S/O Module, as shown below.
9.8.2.5. W/O Module Transactions
Owing to the complexity of Work Order processing, multiple
transaction records may be generated from the W/O Module. Perhaps the most
basic transaction involves the issuance of materials to a Work Order. As
shown below, materials are first removed from Inventory and then
transferred to the Work Order as work-in-process (WIP) assets:
Returning materials from a Work Order creates records opposite to
those generated when materials are issued:
When materials are scrapped from a Work Order, the WIP Asset Account
is credited for the amount of the Scrap quantity—and the
Manufacturing Scrap Account is debited, as shown below:
When posting Production for a Work Order, a number of different
transactions occur—and each transaction generates its own G/L
record:
Materials that have not already been issued to the Work Order
are issued to the Work Order.
Manufactured Item quantity is entered into Inventory.
Work Order Operations—that is, setup and run time
records—are posted.
Note
If a Bill of Operations is defined for a manufactured Item, both
setup time and run time Costs will be posted to the G/L when production
is posted. Overhead Costs will be added to both the setup time and run
time amounts, if overhead is specified for the given Work Center. In
other words, the posted setup time amount (and also the posted run time
amount) will include not only the setup time charge but also the
applicable percentage of the hourly overhead rate.
A slightly different set of records is generated when posting
Production for a Breeder Item. To begin with, the Breeder Item itself must
be accounted for. Because Breeder Items are transient in nature, their
effect on Inventory is temporary. When Production is posted for a Breeder
Item, a reversed pair of transactions is generated. These paired
transactions effectively cancel each other out. As shown below, Breeder
Items are both consumed by and received from manufacturing:
Next, the material required for Breeder Production must be issued to
the Work Order. The following Accounts are affected when material
requirements are issued to Breeder production:
The Co-Products and/or By-Products which result from Breeder
Production must be received into Inventory, as follows:
And finally, if during Production you vary the standard quantity
when distributing Co-Products and/or By-Products, the following Accounts
will be affected:
When you correct Production posting, the records generated are the
opposite of those generated when Production is posted. Only the materials
and the manufactured Items are corrected when posting a correction. Any
Operations that were posted must be corrected separately.
Note
You may not post a correction to a Work Order that manufactures a
Breeder Item. Instead, you must manually adjust the Quantity on Hand
values for the Breeder materials, the Co-Products, and the
By-Products.
The records generated when posting miscellaneous Production are
similar to those generated when posting regular Production—the main
difference being that when Operations are posted, the Inventory Cost
Variance Account is used instead of the Labor and Overhead Costs
Account.
Note
Miscellaneous Production may not be posted for Breeder
Items.
When Work Order Operations are posted separately from Production
posting, the following Accounts are affected:
The same Accounts affected when posting Operations are impacted in
reverse order when correcting Operations posting:
When closing a Work Order, you may elect to post Material Usage
and/or Labor variances. The sense of the records will depend on the
transaction. If any variances exist for the Work Order in question, the
following Accounts will be affected:
9.8.2.6. S/R Module Transactions
Sales Order Items are removed from Inventory at the point when they
are issued to Shipping. Issuing Stock to Shipping affects the following
Accounts:
Prior to being shipped, Sales Order Items that have been issued to
Shipping may be returned to Inventory. Returning Stock to Inventory
reverses the transaction records created when Stock was issued to
Shipping:
When Stock is shipped, the Shipping Asset Account is cleared
out—and the Cost of Sales Account is debited, as shown below:
If a Shipment is returned to Shipping, the action reverses the
transaction records generated when the Order was shipped:
When Purchase Order Items are received, they are entered into
Inventory and the P/O Liability Clearing Account is credited for the
Standard Cost of the received Items. If the Items being received are
non-Inventory Items, the appropriate Expense Account will be debited. In
either case, if any P/O Line Item freight charges exist, they will be
debited:
If you need to correct the quantity received for a Purchase Order,
you may do so using the "Correct Receiving" option on the right-click menu
of the "Uninvoiced Receipts" screen. The "Uninvoiced Receipts" screen is
found in the Vouchers section of the P/O Module. Corrections to received
quantity are considered to be S/R Module transactions. The Accounts
affected will vary depending on whether the correction decreases or
increases the original received quantity, as shown below for both
Inventory and non-Inventory Items. Freight expenses may also be
corrected:
Note
While Purchase Order Items are returned using the S/R Module, the
system considers these transactions to be owned by the P/O
Module.
9.8.2.7. A/P Module Transactions
Even though Vouchers may be posted from the P/O Module, these
transactions are owned by the A/P Module. Posting a Voucher affects
several Accounts. The Accounts Payable (A/P) Account is credited for the
Voucher amount. The P/O Liability Clearing Account is debited for the
Standard Cost of the Items received against the given Purchase Order. If
there are differences between the Vouchered amount and the Standard Cost
of received Items, the Purchase Price Variance Account will be debited or
credited to reflect those differences. Finally, Freight charges may be
added, depending on the details of the transaction.
Note
The same Accounts are affected regardless of whether a Voucher is
posted for Inventory or non-Inventory Items.
If you make a miscellaneous distribution when posting a Voucher, the
following additional Accounts will be affected. The debit side of the
transaction will vary depending on whether a miscellaneous Account or an
Expense Category is selected:
Tip
You may reverse the sense (Db/Cr) of a miscellaneous distribution
by entering a negative distribution amount.
When a miscellaneous Voucher is posted, the debit Account may
vary—depending on the circumstances of the transaction. As with
regular Vouchers, though, the Accounts Payable Account is credited, as
shown below:
Purchasing Discounts may be taken when a Voucher is selected for
payment. The following Accounts are affected when applying a Discount to a
Voucher:
When posting Checks, the Bank Account selected at the time of
posting determines which Asset Account will be used. This is true whether
posting a single or multiple Checks. The following Accounts are
affected:
The Accounts affected differ slightly when a miscellaneous A/P Check
is posted, as shown below:
Miscellaneous A/P Credit Memos may be used, among other things, to
register prepaid amounts paid to Vendors. The following Accounts are
affected when a miscellaneous A/P Credit Memo is posted:
Note
The system does not generate G/L Account records when a
miscellaneous A/P Credit Memo is applied to either a Voucher or a
miscellaneous A/P Debit Memo.
Similarly, miscellaneous A/P Debit Memos may be posted, with the
reverse Accounts being affected:
9.8.2.8. A/R Module Transactions
The G/L records generated when Invoices are posted are fairly
straightforward. The Accounts Receivable (A/R) Account is debited, and the
Sales Account credited. Several other Accounts may also be credited,
depending on whether any additional charges are associated with the
Order:
When posting a Cash Receipt, the Asset Account specified for the
selected Bank Account is debited, while the Accounts Receivable (A/R)
Account is credited:
Note
The Asset Account used when posting Cash Receipts will vary
depending on which Bank Account is specified.
If you enter a Cash Receipt and do not apply the cash to an open
Invoice (and your system is not configured to enable Customer Deposits),
the following Accounts will be affected when the Cash Receipt is posted.
In this example, a miscellaneous A/R Credit Memo will be generated—a
Credit Memo which may be applied at a later point. The Credit Memo portion
of the transaction is represented by the second pair listed below:
If your system is configured to enable Customer Deposits, then the
following alternate Accounts will be affected when you post an unapplied
Cash Receipt balance. The Credit Memo portion of the transaction is
represented by the second pair listed below:
The Deferred Revenue Account will be cleared when the Credit Memo
generated by the Customer Deposit is applied to A/R open items:
If you make a miscellaneous distribution when posting a Cash
Receipt, the following additional Accounts will be affected:
Tip
You may reverse the sense (Db/Cr) of a miscellaneous distribution
by entering a negative distribution amount.
When S/O Credit Memos are posted, the S/O Module owns the Inventory
return process; however, the billing aspects are owned by the A/R Module.
The following Accounts represent the billing portion of an S/O Credit Memo
posting:
Miscellaneous A/R Credit Memos may be used, among other things, to
register prepaid amounts received from Customers. The following Accounts
are affected when a miscellaneous A/R Credit Memo is posted:
Similarly, miscellaneous A/R Debit Memos may be posted, with the
reverse Accounts being affected:
When charging a Customer Credit Card on the Sales Order "Payments"
tab, you get the same transactions as when posting an unapplied Cash
Receipt. A miscellaneous A/R Credit Memo will be generated—a Credit
Memo which should be applied at a later point—and the Cash is posted
to the Asset Account for the relevant Bank Account:
Tip
The default Bank Account used for Credit Card charges is defined
on the "Configure Credit Card" screen in the System Module. This Bank
Account may be different from other Bank Accounts used for other
purposes.
9.8.2.9. G/L Module Transactions
G/L transactions entered from the G/L Module may affect the broadest
possible spectrum of G/L Accounts. For example, the following actions are
user-defined, meaning the Accounts affected will vary from
case-to-case:
When posting a Bank Adjustment, the sense of the transaction will
vary based on the Adjustment Type:
