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How to setup Item Charge Posting Group | G/Ls?

Posted on by 46
Created a "Freight In" account for Landing Costs #520100. Not sure if this is correct for Purchasing side. 
 
Please let me know, thanks!
 
 
  • Suggested answer
    Valentin Castravet Profile Picture
    Valentin Castravet 7,256 Super User on at
    How to setup Item Charge Posting Group | G/Ls?
    Typically you really only need the Purch. Account and the Direct Cost Applied Account. Line discount and invoice discount if you enter discounts.
     
    COGS is only used for sales so you dont need it. Inventory Adjmt. is basically only used for item journal transactions which are not item charge related. Overhead applied account is used if the item on the item card has a value in the overhead % field so its not item charge related. 
     
    Also, an item charge is capitalized on the inventory account in the balance sheet (increases the inventory value by the item charge amount). What this means is that when you post an item charge the system will Debit the Purchases Account and Credit the Direct Costs Account; and Debit the Inventory Account and Credit the AP Account. In your case the Purchases and Direct Costs Applied account are both 520100 so the debit and credit will both go to 520100 so the net change in this account will always be a zero. For this reason, often times I don't create a separate GL account for item charges but use the same purchases and direct cost applied account that regular items use. If you want to track the value of item charges in the purchases account, then you can make the purchases and direct cost applied account separate accounts. But regardless, even if they are separate accounts they will still zero out. 
     
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    gdrenteria Profile Picture
    gdrenteria 5,038 Super User on at
    How to setup Item Charge Posting Group | G/Ls?

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