inventory vs purchase ( cost of good sold )

Hi  vkumar 

thanks for your prompt reply .

yes , it is

1. debit inventory credit  PO accrual

2. Debit  PO accrual , credit to Trade payable 

which mean system will direct offeset PO accrual and credit to trade payable ? 

can I check with you why the closing is 
Zero transaction in my system ? 

Hope to hear from you soon

Hi vkumar 

usually , the cost of good sold In P&L  is equal to purchase + ( movement of closing stock)

if base on transaction that you mentioned .does it mean the cost of good that you mean is reflected in P&L ? Which mean no closing stock in P&L? 

Hi Erin

You are correct. The Cost of goods sold and the ‘Revenue’ (sales) is reflected on P&L. The inventory (Closing stock) is reflected  on Balance sheet. 

Hope this clarifies.

Regards
 

Hi vkumar 

thank very much for your reply .

Can I finalized at once inventory issue , system will auto capture credit inventory and debit to purchase ( cost of good sold) ? that is the reason no closing stock in P& L and only inventory in BS ? 
 

For the PO in accrual is only capture purchase of inventory and not belong to cost of good sold 

please correct my understanding  of system logic is correct .

Hi Erin

You are correct.  Let me know if you have further questions,

Regards,