Accounting entries during process change in production

Hi
Can someone tell me what will the accounting entries be during a production cycle from one process to another?
For example.. raw materials first put into first process of production... then second process and so on....
how are the WIP account and Semi finished account used?
Thanks

Cost of Good Manufactured.
At the time of WIP Calculation
Work in process Ac--DR
TO Change in stock ac
At the time of settlement
Change in stock ---DR
TO WIP Ac
Best Regards
Ashish Jain
Message was edited by:
Ashish Bohara

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Accounting entries during production cycle

Hi
Can someone tell me what are the accounting entries that take place during production from one process to another? Where is the accounts configured?
Thanks

Anyone?

Accounting Entries for Materials Return from Production Order

Dear Gurus,
I have a scenario here that a raw material, valuated at moving average = 151 and qty = 100, was issued to a production order last month. Due to some issue the order was not completed for a while and 93 qty was consumed for the order and because the remaining 7 were excess they were returned to the storage location. By that time the MOV had changed from 151 to 185 and the 7 qty was returned not at 151 (which would be correct) but at 185. This is a wrong accounting entry as it is showing an under consumption for the order.
Anyone have an idea why the system is doing this because the material should be returned on the price it was issued at so that the accounting entries are knocked off (The accounting entries for return deliveries to vendors are of the same price that they are recieved no matter how ever long a period they are returned). How do we stop the system from doing so and if it cannot be done what is the solution to the scenario.
Regards,

The normal entires are as follows (depending on your configuration);
1) Goods issue;
Credit inventory and debit COGS;
2) Billing document;
Debit customer account credit sales accounts;
3) Payment;
Credit customer account and debit cash/ checking account
pls assign points if helpful as a way to say thanks.

Accounting Entries During RMA (Inclusive VAT)

Can any bdy please let me know, what all accounting entries will get generate during RMA, (Inclusive VAT Accounting Entries)
Thanks in advance....
Thanks & regards,
Ankur Dawra

Hi,
I am not sure whether I got your question correctly.
Which Tax Procedure are you using?
If its TAXINJ, then create a PO with a 0% taxcode & as you mentioned change the base amount during MIGO & post the excise. In case of VAT, at the time of MIRO select a VAT tax code manually & enter the amount in MIRO on which you want to calculate VAT.
System will calculate the tax on the amount you enter & will post the same to Separate G/L.
Hope its clear.
Regards,

Accounting Entries during MIRO for a WBS Purchase order - reg

Hi,
I have created a Purchase order with account assignment as Project and attached a WBS element in the Account assignment tab. There is no GR involved in this PO.
When i am trying to do the Invoice verification, it generates the accounting entries as follows
Vendor G/L account Credited
GR/IR account with Zero value
G/L account assigned to WBS element Debited.
In actual i dont want to see the GR/IR account with zero values as an additional entry as it does not makes sense to have an entry with a zero value.
Please expedite with your valuable suggestions to eradicate the unnecessary entry of GR/IR during invoice posting.
Regards,
RitiG

HI,
I hope so ,there might be a problem at the PO creation Level.
an Account assigned PO can be Payed directly by MIRO.
But the folloeing setting has to be Made .
IN the Delivery Tab,uncheck the GR Tick Mak
and in the Invoice Tab GR IV tick Mark.
if these Ticks are unchecked ,then it would be a pure PO based IV and the posting should be in the Following Manner
Vendor
GL -- COnsumption..WHich is maintained in PO
+ any TAX related GLS that are affects do due to TDS(withholding ) or TAXINN
HOpe so it helps
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Accounting Entries During GR

Dear Gurus,
We have activated material ledger with Transaction based price determination. System has posted following 2 accounting entries for GR.
I am Unable to ubderstand why 2 entries.One of doc typpe WE and the other ML.
The PO is an import one MIRO is done twice for this first for del cost and then for Material.
ML Entry--Stock RM 713898.94-
                Price Diff   713898.94
WE Entry--
Stock RM 8061600
GR/IR   6653780-
Price Diff   713898.94-
Prov Frieght1000.06-
Prov Cust Clear 199.95
Prov Cust Clear 665683.08
Prov Insurance 2049.70
Prov Port Charge100.14
DO Fee23288.23
Inland Transport 1599.90
I am able to ubderstand that first entry is something due to Material Ledger.But donot know exactly whay the amounts that is break up.Also how the system determines how much should go to PRD account.I understand basic setteing in OBYC.
Request all also to please share ifany doc for accounting entries for ML?
Can any body explain above entries?
Regards
Raju

Hi Raju,
The entries in the second instance correspond to the condition types in your PO. Please check the condition type settings for the PO.
The system determines the amount to be posted in the PRD account on the basis of your inventory pricing strategy.
Thanks
Anand

Account Entries During outgoing Excise inv creation

Hi All,
When Billing Document is created, Corresponding A/C Entry - (GL A/Cs from VKOA & Tax Codes)
Customer A/C Dr. (Recon GL BS Current Assets)
To Sales A/C (P&L GL Income)
To BED. Recovered A/C / Cenvat Suspense A/C
To E.Cess Recovered A/C / Cenvat Suspense A/C
To S&H E.Cess Recovered A/C / Cenvat Suspense A/C
When BED / E.Cess / S&H E.Cess Recovered A/Cs are used - These are P&L A/Cs & Grouped as Income A/Cs in FS Version.
When Cenvat Suspense A/C is used - It is BS A/C & Grouped in Current Liabilties in FS Version
When Creation of Excise Invoice - (GL A/Cs against ETT - DLFC)
E.D Paid A/C / Cenvat Suspense A/C Dr.
To BED. Payable A/C (BS GL Current Liabilities)
To E.Cess Payable A/C (BS GL Current Liabilities)
To S&H E.cess Payable A/C (BS GL Current Liabilities)
When E.D. Paid A/C (P&L GL - Expenditure)
When Cenvat Suspense A/C (BS GL - Current Liabilities)
in some G/L Account there is '/ " for BS G/L & P&L G/L May I Know why it ????/& in which case we use BS & P&L account???????????

Thxxx BSR
We may configure the excise collection in two ways.
1. If we configure cenvat suspense while doing billing document, the same suspense account should be debited while excise invoice generation.
2. If we configure ED recovered a/c while billing document, excise duty(expenses a/c) to be configured to offset while creating excise invoice.
Either way you can follow.
would u pl clarify when should i go for 1 way & when 2???????????. & why there r these two ways?????????
Thxxx once again

Individual purchase order - Accounting entry with account assignment M

I want to use the individual purchase order with account assignment M .
Can someone please tell me what would be the correct accounting entry during GR and during delivery?
Process is
Order -> pruchase req -> purchase order -> Goods receipt - > Delivery-> Billing
During order creation system asks for a consumption account against GBB-VKA
On GR the below entry is posted .
Dr GBB-VKA consumption
Cr WRX GR/IR .
Is this correct ??
If so what is the entry after delivery goods issue .

Hi Hitesh
I am now wondering if this is possible
When PO has acct assignment to CC or IO, GR hits consumption
With Wbse, it can hit to stock account. Am wondering whether it will hit stock account if the PO has acct assignment to sales order...
I have seen sap notes for this scenario and my memory says I have seen the GR hitting consumption in those notes. There was an issue in scn where price diff upon invoice in such a scenario was not hitting vprs. For that there was sap note.
Let us hear from others
Let me tag some stalwarts here. Waman Shirwaicar Szymon FIN Maslowski arturo senosain G Lakshmipathi
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Changing GR/IR clearing account in Service Entry Sheet process

Hi,
We are using one Gr/ir clearing account for both Material and Service Entry sheet process.
Now for clear process we want to create new account for the Service entry sheet.
We have given blank valuation class for Service entry sheet and it has been assigned to the g/l account.
After analysing the scenario we had two options.1. Whether we can change the valuation class
or 2. we can create new G/l account.
But i had a doubt will it impact anywhere if i change the valuation class.
Can anybody advice me??
Thanks n regards,
Veena

Dear Javeed and Sadhashivan,
Thanks for your answers. Yes we have sort key set on both the accounts and also we have tried to display all the PO relevent fields but unable get through.
Please note we need PO no line wise on the ledger of adjustment accounts NOT on the GR/IR account.
1) Goods Delivered but not yet invoiced
2) Goods Invoiced but not yet Delivered
Hope I have made my point clear.
Thanks
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Production order settlement (Accounting entries)

Dear Sapians,
I need your advice to clear my following confusion:
I have a finished material which is maintained on Variable price in material master. Assume the price being 100 and only 1 item is in stock currently.
My production department produces 1 qty of the same material now and the total cost of that comes to 500.
Now when the finished goods GR is done to store. The material price booked is picked from the current material master price (i.e) 100. The system posts the following entry
FG Stock A/c Dr 100
   To Cost of good sold 100.
Now the production department is doing the settlement of the above production order. After settlement my material master price changes from 100 to 300 (i.e) 2*300=600. (I find no accounting entry generated during settlement) What actually happens during settlement?
When the goods is delivered(PGI) for sale to the customer. (eg) we sell one unit
The system passes the following entry:
Cost of goods sold A/c Dr      300
To FG Stock A/c                    300
I this above case i feel that my finished goods stock will go negative.
Is the above activity correct?.
I will be greatful if you can explain me the above process completely.
Regards
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Dear Deepak
Thanks for all your help. I have assigned the maximum point which i can for your support.
Actually the accounting entries i was looking for is as follows:
When 101 is done after production (i.e) GR after production
FG STock A/c
To Factory output A/c
The above entry is posted @ price maintained in the material master.
When the actual settlement of Production order is done using tcode KO88 the system posts the variance between the material master price and the actual price and posts
FG Stock A/c DR
To Factory output A/c
(in case of actual cost is more than the material master price)
OR
Factory output A/c
To FG Stock
(In case of actual cost is less than the material master price)
Please correct me if i am wrong
Once again thanks for you time
Regards
Naveen

Production order settlement accounting entry

Hi,
Can u gibve some link what is production order settlement , and how the accounting entry is generated, our PP person have done the settlement in april 2010 but accounting entry are not updated in the corresponding g/l account how to check this.
regards,
zafar

Production order settlement is just a process of closing the order after goods recipt (production) is being booked in system
Production order settle the costs to CCNs from the orders. It doesnt have any entry unless under / over absorption. In that case following entry will be generated (i.e. of difference amount)
Inventory Change Dr. To Inventory & vice a versa as the case may be of under/over absorption.
If you go thru MB5B for the material, you will find the same without any Mvt. type.
Hope it is clear.
R/s

Accounting entry - WIP, Variance Calculation & Settlement of Production Orders

Hi All,
Please explain the process of WIP calculation, variance and settlement of production orders. At each stage will there be an accounting entry generated?
1. WIP calculation: All production orders for which the status is REL at the month end will be included in WIP calculation. How the amount of WIP is derived and what will be the accounting entry.
2. Variance calculation: Production order needs to have the status TECHO in order to do the variance settlement. Will there be an accounting action and how the amount will be calculated?
3. Settlement of Production Orders: Dr. WIP A/c (Balance Sheet a/c)
                                                    Cr. Volume Variance WIP a/c (P&L Account)
    Is this the correct accounting entry? If yes, please advice how the WIP a/c is showing balance on settlement of production order, how it will get nullified? If no, please advise on the correct process?
Regards

Dear Andy
In product cost by order scenario the WIP or Variance calculation is dependent on order status. If the Order has a status of REL or PDLV, the system will calculate WIP and if the order status is DLV or TECO the system will calculate variance on this order. At the time of calculation of WIP or Variance no accounting entry i generated but when you settle the order at that time FI documents are passed in the books.
Ans1- In product cost by order WIP or variance is calculated based on the actual cost debited to the order and value of GR made to the order. System does calculation by the formula GR value-(GI value+Activity value+ Overheads)
Ans2- As I said at the time of calculation no FI entries are passed but at the time of settlement FI entries are generated. The method of calculation is the same as described in Ans1.
Ans3- Entry at WIP settlement WIP (P&L) a/c Dr and WIP Offsetting(B/S a/c) Cr.
          Entry at variance settlement : Variance a/c dr/cr and COGM cr/dr.
          and if there is already a WIP posted for this order then at settlement WIP entry is reversed provided we have calculated WIP again the the month of settlement of variance
Note for Anand: Dear Anand we need to calculate WIP again in the period when the order status is changed to DLV or TECO otherwise system will not pass reversal entry of WIP. Kindly test it in your IDES and let me know if you find something on the contrary.
Regards
Rajneesh Saxena

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Accounting entries during process change in production

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