TechKnowledge Content
Note: The General Ledger is only updated by Inventory transactions when 'Update GL for All Inventory Transactions' is selected in IN Setup (10.950.00) - Options.
How the General Ledger is Affected when Selling an Inventory Item in Order Management Results in a Negative Quantity
Average Cost:
The Inventory Account is Credited and the Cost of Goods Sold (COGS) Account is Debited with the Average Cost of the Item.
FIFO Cost:
The Inventory Account is Credited and the COGS Account is Debited with the Last Cost of the Item.
Standard Cost:
The Inventory Account is Credited and the COGS Account is Debited with the Standard Cost of the Item.
User Specified Cost:
The Inventory Account is Credited and the COGS Account is Debited with the Cost entered on the Line Item of the Sales Order/Shipper.
Specific Identification Cost:
This valuation method does not allow quantities to go negative.
How the General Ledger is Affected when Releasing a Purchase Order Receipt or Inventory Receipt batch for an Inventory Item with a Negative Balance
Average, FIFO, LIFO Costs:
- The Inventory Account is Debited and the Accounts Payable Trade Account is Credited with the Item’s Cost on the Receipt.
- An Adjustment batch is automatically created and released which populates the INTRAN and GLTRAN tables as follows:
A ‘Reverse of the Original Transaction’ occurs, the Inventory account is Debited, and the COGS account is Credited for the original transaction amount.
An ‘Adjusting Transaction for the Oversold Inventory Item’ occurs, the Inventory Account is Credited, and the COGS account is Debited for the new transaction amount.
Standard Cost:
The Inventory Account is Debited and the AP Trade Account is Credited with the Standard Cost of the Item.
User Specified Cost:
The Inventory Account is Debited and the COGS Account is Credited with the cost entered on the Receipt.
Specific Identification Cost:
This valuation method does not allow quantities to go negative.
Additional Resources
Knowledge Base Article 867984 explains where the Accounts and Subaccounts in ARTRAN and INTRAN originate from.
