MIR7 / MIRO

Question

Dear All,
Can anybody help me in understanding of MIR7/MIRO Posting in FI.
i.e  In which case it will post in material A/c
In which case it will Post Price diff. A/c,
IN which case it will posr invoice reducrtion etc.
Regards
Swati

Answer 1

Dear Swati,
MIR7 is to park the Invoice verification
MIRO is to post the invoice verification.
As you aware MM entries to Finance.
Now i will give a example on your scenarios
1. Post in Material.
You purchased 100 bags of cement @ 100 each , as per your contract you are not paying him transportation charges, which is not mentioned in your purchased order , but at the time of invoice verification you got the transportation bill for Rs.100 and which was approved outside purchase order now you are going to pay him, that time the extra cost 100 . So your total value is 10,100. 
Now when you process this 10,100 rupees  the entries are as follows.
Inventory entry
Inventory A/c Dr    10,000
    To GR/IR  A/c  Cr     10,000
MIRO or MIR7 Invoice Verification
GR/IR A/c  Dr 10,000
Inventory A/c Dr 100
    To Vendor A/c   Cr 10,100
+Note: The Material Account has got hit automatically for that 100, on the value you had given at the time of MIR7 or MIRO. The base condition for this is your stock should have not consumed at the time of Invoice entry. It is a simple logic if you want to affect the stock value means you should have some stock in your plant if not it will go to price difference A/c +
2. Price Difference account
Inventory entry
Inventory A/c Dr    10,000
    To GR/IR  A/c  Cr     10,000
MIRO or MIR7 Invoice Verification
GR/IR A/c  Dr 10,000
Price Difference A/c  Dr 100
    To Vendor A/c   Cr 10,100
Note : In this case there is no stock for the Materials in your books so it has triggered the Price difference account instead of Material A/c
Hope it clears you to some extent, and as for your third scenario which is not clear to me.
Kindly revert back for any clarifications.
thanks and regards
Praveen.J