Inventory Related Accounts - Revision history

Dene at 23:27, 10 May 2011

2011-05-10T23:27:09Z

Dene at 23:26, 10 May 2011

2011-05-10T23:26:31Z

Eliza at 02:30, 3 March 2011

2011-03-03T02:30:30Z

Eliza at 02:30, 3 March 2011

2011-03-03T02:30:06Z

Admin at 06:56, 13 January 2011

2011-01-13T06:56:44Z

Admin: Created page with " Product Screens= Inventory Related Accounts Bins and Batches Manufactured Product Extra Buy Price Extra Sell Price [[..."

2011-01-13T06:56:09Z

Created page with "</menu> <menu name=myMenu2 align=center> Product Screens= Inventory Related Accounts Bins and Batches Manufactured Product Extra Buy Price Extra Sell Price [[..."

New page

</menu>
<menu name=myMenu2 align=center>
Product Screens=
[[Inventory Related Accounts]]
[[Bins and Batches]]
[[Manufactured Product]]
[[Extra Buy Price]]
[[Extra Sell Price]]
[[Miscellaneous]]
[[Picture]]
[[Quantities]]
[[Serial Number]]
[[Tax Codes]]
[[Product Formulas]]

</menu>

== Overview ==

@@ Line 21: / Line 21: @@
 *'''COGS Account'''
 *'''Asset Account'''
-*'''Income Account'''
+*'''Income Account
 '''Inventory Parts.'''
 <u>Asset Accounts</u>
 When an Inventory Part is purchased your Inventory '''Asset Account''' is increased by the '''Average Cost''' and your bank account is reduced by the same amount. If you don't pay for the product immediately then your Accounts Payable increases. Overall the value of your assets on your balance sheet don't change and this transaction has no impact on your Profit and Loss ie you swap product for cash.
 The cost of the Inventory Part is offset against income at the time it is sold via the '''COGS Account. '''
@@ Line 35: / Line 37: @@
 Your profit on this transaction as shown in the Profit &amp; Loss account is the '''Income''' less '''COGS.'''
 '''What if I sell a product that has zero or negative stock?'''
 '''What if I sell a product that has zero or negative stock?'''
 If your stock is at or below zero and you sell the product, ERP uses the last average cost used for the COGS account. It does this by using the average cost of the product at the time that the quantity went to zero. If no stock has ever been purchased this figure will be zero. This figure is then adjusted, automatically by ERP Software to reflect the actual cost of goods sold the next time you purchase stock in and bring the quantity to zero.
 <u>So in this case the the COGS posting will be on the purchase order transaction not on the sales transaction.</u>
 '''Non-Inventory Parts'''
@@ Line 49: / Line 53: @@
 When purchasing a Non Inventory Part, the purchase price is posted as an expense to the COGS account and your Cash is reduced (or Accounts Payable increased).
 On the sale of a Non-Inventory Part, the '''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases) by the same amount.<br>
 '''Other Type.'''
 These products are generally not purchsed. eg. It may be a service your provide. Sales of Other type products are posted to the income account as for Non-Inventory Asset products as above. If you do purchse an Other type product the cost is posted as a negative sale to the Income Account.

@@ Line 17: / Line 17: @@
 == Overview  ==
-There are three accounts linked to an Inventory Part at the time the product is created. Correct selection of these
+There are three accounts linked to an Inventory Part at the time the product is created. Correct selection of these accounts you should understand how these accounts are used by ERP Software. The accounts are:
-accounts you should understand how these accounts are used by ERP Software.  The accounts are:
 *'''COGS Account'''
@@ Line 24: / Line 23: @@
 *'''Income Account'''
-Inventory Parts When an Inventory Part is purchased your Inventory '''Asset Account''' is increased by the net cost and your cash asset is reduced by the same amount (or your accounts payable increases). Overall the value of your assets does not change and this transaction has no impact on your Profit and Loss. The cost of the Inventory Part is offset against income at the time it is sold via the Cost of Goods Sold or '''COGS Account. '''
+'''Inventory Parts.'''
-If you are using the Average Cost method of stock valuation, at the time an Inventory Part is sold, the '''Asset Account''' is reduced by the Average Cost and the '''COGS''' account is increased by the Average Cost. At the same time the '''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases) by the same amount. Your profit on this transaction as shown in the Profit &amp; Loss account is the'''Income''' less '''COGS.'''
+<u>Asset Accounts</u>
-What if I sell a product that has zero or negative stock?
+When an Inventory Part is purchased your Inventory '''Asset Account''' is increased by the '''Average Cost''' and your bank account is reduced by the same amount. If you don't pay for the product immediately then your Accounts Payable increases. Overall the value of your assets on your balance sheet don't change and this transaction has no impact on your Profit and Loss ie you swap product for cash.
-If your stock has been reduced to zero and you process another sale ERP Software has to guess what the cost of goods sold will be. It does this by using the average cost of the product at the time that the quantity went to zero. If no stock has ever been purchased this figure will be zero. This figure is then adjusted by ERP Software to reflect the actual cost of goods sold the next time you purchase stock in and bring the quantity to zero.
+The cost of the Inventory Part is offset against income at the time it is sold via the '''COGS Account. '''
-'''Non-Inventory Parts''' Non-Inventory Parts are not included in your Inventory Assets Account but are expensed at the time of purchase.
+If you are using the Average Cost method of stock valuation, at the time an Inventory Part is sold, the '''Asset Account''' is reduced by the Average Cost and the '''COGS''' account is increased by the Average Cost. At the same time the '''Income Account''' is increased by the sell value and your cash increases. If you dont get paid immediately then your Accounts Receivable increases.
-When purchasing a Non Inventory Part, the nett purchase price is posted as an expense to the COGS account and your Cash is reduced (or Accounts Payable increased).
+Your profit on this transaction as shown in the Profit &amp; Loss account is the '''Income''' less '''COGS.'''
-Other type products are generally not purchsed. eg. It may be a service your provide. Sales of Other type products are posted to the income account as for Non-Inventory Asset products as above. If you do purchse an Other type product the cost is posted as a negative sale to the Income Account.

@@ Line 15: / Line 15: @@
 </menu>
-== Overview ==
+== Overview  ==
-There are three accounts linked to an Inventory Part at the time the product is created.  Correct selection of these
+There are three accounts linked to an Inventory Part at the time the product is created. Correct selection of these
- accounts you should understand how these accounts are used by ERP Software.  The accounts are:
+accounts you should understand how these accounts are used by ERP Software.  The accounts are:
 *'''COGS Account'''
 *'''Asset Account'''
 *'''Income Account'''
-If you are using the Average Cost method of stock valuation, at the time an Inventory Part is sold, the '''Asset Account'''
+Inventory Parts When an Inventory Part is purchased your Inventory '''Asset Account''' is increased by the net cost and your cash asset is reduced by the same amount (or your accounts payable increases). Overall the value of your assets does not change and this transaction has no impact on your Profit and Loss. The cost of the Inventory Part is offset against income at the time it is sold via the Cost of Goods Sold or '''COGS Account. '''
-is reduced by the Average Cost and the '''COGS''' account is increased by the Average Cost.  At the same time the
-'''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases)
-by the same amount.  Your profit on this transaction as shown in the Profit & Loss account is the''' Income''' less '''COGS.'''
-'''
+If you are using the Average Cost method of stock valuation, at the time an Inventory Part is sold, the '''Asset Account''' is reduced by the Average Cost and the '''COGS''' account is increased by the Average Cost. At the same time the '''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases) by the same amount. Your profit on this transaction as shown in the Profit &amp; Loss account is the'''Income''' less '''COGS.'''
-What if I sell a product that has zero or negative stock?'''
-If your stock has been reduced to zero and you process another sale ERP Software has to guess what the cost of goods
+What if I sell a product that has zero or negative stock?
-sold will be.  It does this by using the average cost of the product at the time that the quantity went to zero.  If no stock
-has ever been purchased this figure will be zero.  This figure is then adjusted by ERP Software to reflect the actual
-cost of goods sold the next time you purchase stock in and bring the quantity to zero.
-'''Non-Inventory Parts'''
+If your stock has been reduced to zero and you process another sale ERP Software has to guess what the cost of goods sold will be. It does this by using the average cost of the product at the time that the quantity went to zero. If no stock has ever been purchased this figure will be zero. This figure is then adjusted by ERP Software to reflect the actual cost of goods sold the next time you purchase stock in and bring the quantity to zero.
-Non-Inventory Parts are not included in your Inventory Assets Account but are expensed at the time of purchase.
-When purchasing a Non Inventory Part, the nett purchase price is posted as an expense to the COGS account and your
+'''Non-Inventory Parts''' Non-Inventory Parts are not included in your Inventory Assets Account but are expensed at the time of purchase.
-Cash is reduced (or Accounts Payable increased).
-On the sale of a Non-Inventory Part, the '''Income Account''' is increased by the net sale value and your cash increases
+When purchasing a Non Inventory Part, the nett purchase price is posted as an expense to the COGS account and your Cash is reduced (or Accounts Payable increased).
-(or your accounts receivable increases) by the same amount.
-'''
-Other Products'''
-Other type products are generally not purchsed.  eg. It may be a service your provide.  Sales of Other type products are
+On the sale of a Non-Inventory Part, the '''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases) by the same amount. Other Products
-posted to the income account as for Non-Inventory Asset products as above.  If you do purchse an Other type product the
-cost is posted as a negative sale to the Income Account.
+Other type products are generally not purchsed. eg. It may be a service your provide. Sales of Other type products are posted to the income account as for Non-Inventory Asset products as above. If you do purchse an Other type product the cost is posted as a negative sale to the Income Account.

← Older revision		Revision as of 02:30, 3 March 2011
Line 16:		Line 16:

	== Overview ==		== Overview ==
		+
		+	There are three accounts linked to an Inventory Part at the time the product is created. Correct selection of these
		+	accounts you should understand how these accounts are used by ERP Software. The accounts are:
		+
		+	*'''COGS Account'''
		+	*'''Asset Account'''
		+	*'''Income Account'''
		+	'''
		+	Inventory Parts'''
		+	When an Inventory Part is purchased your Inventory '''Asset Account''' is increased by the net cost and your cash
		+	asset is reduced by the same amount (or your accounts payable increases). Overall the value of your assets does
		+	not change and this transaction has no impact on your Profit and Loss.
		+	The cost of the Inventory Part is offset against income at the time it is sold via the Cost of Goods Sold or
		+	'''COGS Account. '''
		+
		+	If you are using the Average Cost method of stock valuation, at the time an Inventory Part is sold, the '''Asset Account'''
		+	is reduced by the Average Cost and the '''COGS''' account is increased by the Average Cost. At the same time the
		+	'''Income Account''' is increased by the net sale value and your cash increases (or your accounts receivable increases)
		+	by the same amount. Your profit on this transaction as shown in the Profit & Loss account is the''' Income''' less '''COGS.'''
		+
		+	'''
		+	What if I sell a product that has zero or negative stock?'''
		+
		+	If your stock has been reduced to zero and you process another sale ERP Software has to guess what the cost of goods
		+	sold will be. It does this by using the average cost of the product at the time that the quantity went to zero. If no stock
		+	has ever been purchased this figure will be zero. This figure is then adjusted by ERP Software to reflect the actual
		+	cost of goods sold the next time you purchase stock in and bring the quantity to zero.
		+
		+	'''Non-Inventory Parts'''
		+	Non-Inventory Parts are not included in your Inventory Assets Account but are expensed at the time of purchase.
		+
		+	When purchasing a Non Inventory Part, the nett purchase price is posted as an expense to the COGS account and your
		+	Cash is reduced (or Accounts Payable increased).
		+
		+	On the sale of a Non-Inventory Part, the '''Income Account''' is increased by the net sale value and your cash increases
		+	(or your accounts receivable increases) by the same amount.
		+	'''
		+	Other Products'''
		+
		+	Other type products are generally not purchsed. eg. It may be a service your provide. Sales of Other type products are
		+	posted to the income account as for Non-Inventory Asset products as above. If you do purchse an Other type product the
		+	cost is posted as a negative sale to the Income Account.

← Older revision		Revision as of 06:56, 13 January 2011
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	Product Screens=		Product Screens=