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Perpetual Inventory for Non-stock Item

  • 87views
  • February 6, 2024

Perpetual Inventory for Non-stock Item

Question: Perpetual Inventory has been activated in the Company master. However, certain Purchase Invoices still post transactions to the Expense Account.

Answer: In accordance with perpetual inventory, the value of a stock item is only recorded under Stock-in-hand upon purchase. Consequently, the posting in the GL Entry for the Purchase Invoice will occur as outlined below.

Account Debit Credit
Creditors 100
Stock Received but not Billed 90
Tax 10
Perpetual Inventory is not applicable to non-stock items, and expenses are immediately recorded for them upon submission of the Purchase Invoice. The posting in the General Ledger for this scenario will appear as follows:
Account Debit Credit
Creditors 100
COGS / Other Expense Account 90
Tax 10