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Hi all,
When I put through a purchase invoice from a purchase order for an item with Project Code A, these are the entries created:
Account Debit Credit Project Code
Purchase Expense 100 A
Purchase Expense 100 A
Trade Creditors 100 A
Cost of Sales (Interim) 100 A
Cost of Sales (Interim) 100 A
Inventory Account 100 A
Although I don't understand why the software has to use Purchase Expense & Cost of Sales (Interim) accounts, it's fine since they offset each other.
However, when I post an item reclassification journal to move this iten from Project A to Project B, the general ledger entries are created as:
Account Debit Credit Project Code
Inventory Account 100 B
Inventory Account 100 A
Purchase Expense 100 A
Purchase Expense 100 B
The lines in red mess my profit & loss statement up for both projects: now I have a negative expense in project B report.
Meanwhile, project A shows +100 in expenses although I haven't consumed the item yet.
I just want to move the amount from balance sheet A to balance sheet B without touching the expense accounts.
May I ask what I did wrong, or if my account settings are incorrect?
Thank you
Some clarifications, in the Purchase - Cost of Sales (Interim) is actually Interim Inventory.
Purchase Expense is Purchases and Cost Applied, I like to use two account so you can verify they offset.
For Item Reclassification, Purchase Expense is actually Inventory Adjustments. Taking inventory one project to another which is a cost from project A and a reduction of cost for project B.
I would suggest using a 'Direct' Transfer Order.
#1
Sohail Ahmed
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YUN ZHU
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Super User 2025 Season 1
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Mansi Soni
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