I have an odd situation. We placed a purchase order for an item but omitted the landed cost. When the product was received, the receiving entry was made, but when the invoice was received, it had an extra freight charge on it that didn't match the PO. (NB: we were aware of the charge, it just wasn't entered as part of the landed cost) When the Purchasing Invoice Entry was done, that amount was put directly into the inventory GL account.
We use weighted average costing for this item. I'm pretty sure that the current cost of the item is understated by the amount of the freight.
Example for clarity:
PO for 1000 items @ $50 = $50k
Freight, added by the vendor = $5k
We received the product & created the receiving transaction:
Debit 'Inventory' $50k, Credit 'Accrued Inventory' $50k
We received the Invoice:
Debit 'Accrued Inventory': $50k, Debit 'Inventory': $5k, Credit 'AP': $55k
So, if I understand it correctly, the current (average) cost of my inventory is $50, and I have 1000 of them in stock, but the Inventory GL contains $55k.
I am, obviously, working with the pruchaser to ensure that the proper landed costs are configured to prevent recurrence, but is there an accepted way to fix this? (everything is posted - the error wasn't caught until the end of the month)
Thanks, in advance!
D
