Accounting entries - Interview question

Hi anil,

They are right.. One more account is involved ..I had articleship exposure to do Audits where ERP was prevalent.

Actually, i am not sure about the Account name 100%. Anyhow, it should be something like "Stock ClearingA/c". Because its almost 5 years since i did it, and afterwards i was not exposed to that kind of environment.

In Big companies where ERP is there, when goods are received, Delivery challan is received along with it. At that point of time, the entry is 

Stock Clearing A/c. Dr

To party A/c.

They do this because, the quantity and quality of the materials should match with the PO. Also, the invoice will be received only after two or three days sometimes,

Once the invoice is received, and PO is matched with the inward,

Materials A/c Dr

To Stock Clearing A/c

is passed.

Ideally the stock clearing A/c should not have any balance aged more than a month for domestic. If imports it is subjective.

Totally Agreed with Sukanya 
 

what Mr Anil was asking is any entry to be passed before receipt of material  sukany a answer is after receipt of material.Before receipt of material only Purchase order is raised at that time I dont think so in SAP Erp ANY ENTRY IS PASSED

After receipt of material GRN is prepared using T Code MIGO by calling the relevant Purchase order at that time entry would be

Stock a/dr

To GR/IR Account

When issued for production

Consumption dr

To Stock

At the Time of Booking the Bill presuming Bill and PO Matches in Value using T Code MIRO

GR/IR Account Dr

Excise Duty Dr

Vat Input Dr

To supplier

when the PO Value and Bill Differs  the Difference Debit is given to Stock

Please do correct me if i am wrong

Mr. Sivaram is right. As material was not received in the premises, no entries are required to be passed in books of accounts.

entries are not made only for agreements....raw materials are not actually received but an agreement is made that party will supply material...no goods and no cash involve here only consent is here and which is not a real asset hence nothing to debit....no entry will be made.

I am modifying my reply

There is no entry at the time of Raising Purchase order in SAP but condition is set for taxes

On receipt of material GRN is raised using T Code MIGO  by linking the concerned Purchase order entry passed will be

Dr Stock

Dr Cenvat

Dr Vat

Cr GR/IR

When issued for production

Dr Consumption

Cr Stock

Bill Booking assume PO AND BILL MATCHES IN VALUE

Dr GR/IR

CR VENDOR

IF BILL VALUE IS MORE  THAN PO VALUE DR IS GIVEN TO STOCK IF BILL IS LESS THAN PO VALUE  CREDIT IS GIVEN TO STOCK

Note: In SAP there is no question of purchases and hence we speak about stock and consumption

Dear Sivraman,

First of all let me tell me thank you for correcting me and communicating the correct entry to Anil.

You are absolutely right about what happens in SAP. I was at mistake..

Thanks for the value addition.

I forgot the term "GR/IR" actually, and i remember the nomenclature was "GR/IR clearing" Account. is it correct sir.

Dear anil,

Please dont take my answer as that is not correct.

Thanks for an opportunity given for me to relearn an aspect.

Entry at time of GRN

Stock/Purchases A/c Dr
 To Invoice recd,but not paid

At passing of IV(invoice)

Invoice recd,but not paid A/c Dr

To party A/c

Thank you all for your valuable inputs. I am specially grateful to people in this forum who share their practical experiance with others. May their tribe grow.

Regards,

Anil

Yes sukanya GR/IR Account is a clearing Account or what you say as an intermediary Account