Catch weight profit/loss accounts

Dear all:

Hope you are doing very well.

when I have CW profit/loss case when selling or stock-out CW items , the system post transactions to CW loss account only and not post any transactions to the CW profit account , is this a normal behavior from the system???

Please advice

thanks

Hi,

Using inventory adjustment journal, when you update the quantity of any item the inventory a/c will be debited to inventory profit a/c. Example, existing stock of item A is 5. if you post an inventory adjustment journal with 1 as qty and cost price as 10, Inventory profit a/c will be impacted.

When you reduce inventory using inventory adjustment journal, Inventory loss a/c will be debited to inventory account. Example, existing stock of item A is 5. if you post an inventory adjustment journal with -1 as qty and cost price as 10, Inventory loss a/c will be impacted.

Pranav…

Hi Pranav,

Can u clarify that generally organizations will maintain two accounts like inventory profit and inventory loss or only one account with the name Inventory adjustment ?

Thanks in advance.

Hi Lally,

Maintaining one account will also serve the purpose. This be because profit entry is posted in credit and loss in debit. So we can identify with entry type.

However, it is better if we maintain separate accounts.

Pranav…

Thanks Pranav,

a) Could you explain why we need to maintain the two accounts and business logic ? ( generally in NAV we maintain only one account named as INV adjustmnet , debit or credit goes to that account only )

b) Generally what is the naming clature of these accounts ?

c) In P&L under which group inventory profit and loss accounts will come ?

Each accountant at the client implementing AX will already understand the concept, once how AX does it is explained to them then they decide ultimately on the answers to the above questions, because it is how the business wants to see and name the accounts.

a) Maintaining two accounts are not mandatory. it depends how you want to maintain books. AX has separate fields for Gain and Loss. We can either specify same or different account.

b) Naming can be like Inventory gain/loss or inventory adjustment.

c) Normally it should be put in direct cost group and further under COGS. The grouping also depends on how you design COA. There is no specific criteria.

Pranav…

Thanks Pranav for the answers.

I agree with you also Adam