Purchase Inventory posting in Microsoft Dynamics 365 Finance and Operations

When "post to charge account in ledger" is turned off

When "post to charge account in ledger" is turned ON

Used mostly in Europe where expense accounting method is used and it uses stock variation account (Just talk)

This is why purchase expenditure accounts are used.

Being a global ERP need to address a lot of market regulations

PO Receipt

PO Receipt

1A) Subledger accounting (View accounting shows all 4 postings, while voucher posted to GL would show only the 2 accounts)

2A) Subledger accounting

accounting entry on the product receipt for accrued liability

accounting entries on the product receipt for accrued liability

1)Cost of purchase material received (Dr) Asset

Cost of purchase material received (Dr) Asset

2)Purchase expenditure, un-invoiced  (Cr) Liability

Purchase expenditure, un-invoiced  (Dr) Liability

accounting entry to record the liability for the vendor invoice

3)Purchase expenditure, un-invoiced  (Dr) Liability

Purchase stock variation (Cr) P&L

Purpose of posting charge to ledger was to post the effect of inventory purchase in P&L instead of BS

4)Purchase, accrual (Cr) Liability

Purchase, accrual (Cr) Liability

1B) PO Invoice

2B) PO Invoice

Packing slip reversal (6 entries posted to GL in voucher, whereas in subledger/accounting it shows 8 entries)

Packing slip reversal (not fully)

Cost of purchase material received (Cr) Asset

Cost of purchase material received (Cr) Asset

Purchase expenditure, un-invoiced  (Dr) Liability

Purchase expenditure, un-invoiced  (Cr) Liability

Purchase expenditure, un-invoiced  (Cr) Liability

(NOT REVERSED) Purchase stock variation P&L

Purchase, accrual (Dr) Liability

Purchase, accrual (Dr) Liability

Vendor (AP) (Cr) Liability

Vendor (AP) (Cr) Liability

Cost of purchase materials, invoiced (Dr) Asset

Cost of purchase materials, invoiced (Dr) typically P&L