Dear All,
I have found out that our accounting staff has posted inventories
value directly to G/L without using item journal.
It means that the inventory stock on hand is empty, but the
values exists in G/L entries of inventories.
He posted the item qty of all inventories using item journal with
their values (unit cost, amount), and what happened afterwards are
the balance sheet total is changed and retained earning are increased
Could I correct the values of balance sheet total (liabilities/capital)
? has he done double posting ?
I’ve seen that the inventory values are not increased.
Any answers are appreciated. tku
Rgds,
Andreas
Hi Andreas
Yes the inventory values will in all probability have been doubled. The item journal would have posted the costs against the line to the inventoy account set against the appropriate posting group. The inventory value was also manually entered via a journal by the accountant. If these are the same account it is doubled, if not it will be there twice somewhere. Let the accountant decide which values they will need to journal out, also ask them what they were trying to achieve by the process undertaken - booking in the value from a journal, and then doubling it by booking in the stock.
Tks Steven for your reply. The account is the same, so it has doubled and then how to correct the double ? or can I post the stock using item journal without posting to G/L ? I am afraid if I exclude the gen. bus. posting group and inventory posting group, the error message appears and ask it, but if I ask IT developer to modify the posting code unit, I think it maybe work. I am still confusing.
About your last statement:
Let the accountant decide which values they will need to journal out, also ask them what they were trying to achieve by the process undertaken - booking in the value from a journal, and then doubling it by booking in the stock.
It means that we have to choose one, doesn’t it ?
Rgds,
Andreas
Hi Andreas
You have to remove something as you have doubled it up - I would let the accountant make the judgement - remember this is financial and if they do not remove the manually journalled entries the valuation will never balance to the GL. The booking in of the stock will get associated costs, and depending upon your costing method has different implications if you did not book them in in one line. You cannot post stock without having an affect in the G/L really, unless you are not interested in costing of inventory! Once the cost on the line is used, this is the items cost and the subsequent cost of sale (costing method dependant of course). You could set the costs of the item journal to 0 but then you make 100% profit on each item you sell as the cost is zero. This is a bit like the debtors accounts, you will not create an opening balance for it via a general journal, you would generally enter the detail to get the opening balance as you require the detail - the same is to be said of teh stock, the item journal gets your stock in and creates your opening stock balance, if this is incorrect then you have either used the wrong costs, are revaluing inventory or you have not entered the physical values as per the last system.
Dear Steven,
So, what the accounting staff has done is wrong isn’t it ? I just want to know if I must remove the values posted using General Journal and change using item journal. The erronous must be corrected and we have contacted the consultant from local NSC. You are right about it and tks for your detailed answer. I will review with our team here.
Rgds,
Essentially the accounting staff has doubled the value of the inventory - tell them this - they will understand:
- They entered the value of inventory manually through a journal.
- When the stock was booked in through the item journal it came in at value
You need to correct it through a General Journal, assuming the item journal booked in the correct quantities and stock.