Transactions and Distributions in an Average Cost Organization

Transaction Unit Cost:

Transaction: PO Receipt
Accounting Entries: dr. Receiving Inspection PO price
cr. A/P Accrual
Average Cost Recalculated? No, same as current.
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Transaction:PO Delivery to subinventory
Accounting Entries: dr. Subinventory Valuation PO price +MOH
cr. Receiving Inspection PO price
cr. Material OH Absorption calc’d MOH
Average Cost Recalculated? Yes.
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Transaction: Adjustment to PO Delivery
Accounting Entries: dr./cr.Subinventory Valuation PO price +MOH
cr./dr.Receiving Inspection PO price
cr./Material OH Absorption calc’d MOH
Average Cost Recalculated? No. OK for adjustment to be @ different rate
from original transaction rate
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Transaction: Return to Receiving from subinventory
Accounting Entries: dr. Receiving Inspection PO price
dr. Material OH Absorption MOH
cr. Subinventory Valuation PO price +MOH
Average Cost Recalculated? Yes, if MOH had changed since receipt, must
use original rate— DOCUMENT.
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Transaction: Return to Vendor from Receiving Inspection
Accounting Entries: dr. A/P Accrual PO price
cr. Receiving Inspection
Average Cost Recalculated? No.
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Transaction: Subinventory Transfer—asset subinventory to asset subinventory
Accounting Entries: dr. Subinventory Valuation— receiver Current average
cr. Subinventory Valuation—sender
Average Cost Recalculated? No, in and out of same accounts.
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Transaction: Subinventory Transfer—expense subinventory to expense
subinventory
Accounting Entries: No entries

Average Cost Recalculated? Not applicable, only quantities are impacted.

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Transaction: Subinventory Transfer—asset to expense or vice verse
Accounting Entries: dr. Subinventory Valuation or Expense—receiver
cr. Subinventory. Valuation or Expense—sender

Average Cost Recalculated? No.

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Transaction: Miscellaneous Receipt
Accounting Entries: dr. Subinventory Valuation Current average or U.S.
cr. User-specified Account Current average or user-
specified (U.S.)
Average Cost Recalculated? Yes, if user overrides, new average is
calculated.
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Transaction: Miscellaneous Issue
Accounting Entries: dr. User-specified Account Current average or U.S.
cr. Subinventory Valuation
Average Cost Recalculated? Yes, if user overrides, new average is
calculated.
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Transaction: RMA Receipt
Accounting Entries: dr. Subinventory Valuation Average cost of original
shipments on sales order
line
cr. Cost of Goods Sold
Average Cost Recalculated?Y es, if reference to sales order line exists.
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Transaction: RMA Return
Accounting Entries: dr. Cost of Goods Sold Current average
cr. Subinventory Valuation Current average
Average Cost Recalculated? No.
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Transaction: Direct Interorg Transfer—expense to expense
Accounting Entries: No entries

Average Cost Recalculated? Not applicable. Applies to both standard and

average organizations.
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Transaction: Direct Interorg Transfer—
Std org to Average org except expense to expense
Accounting Entries: dr. Subinventory Valuation—receiver Standard
cr. Interorg Payable
dr. Interorg Receivable
cr. Subinventory Valuation—sender
Average Cost Recalculated? Yes, recalculation of average cost is not
applicable if receiving subinventory is expense.
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Transaction: Direct Interorg Transfer—
Average org to Average org excluding exp to expense
Accounting Entries: dr. Subinventory Valuation—receiver Current average
cr. Interorg Payable (sending org)
dr. Interorg Receivable
cr. Subinventory Valuation—sender
Average Cost Recalculated? Yes, (receiving org) recalculation of average
cost is not applicable if receiving subinventory is expense.
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Transaction: Direct Interorg Transfer—
Average org to Standard org excluding expense to expense
Accounting Entries: dr. Subinventory Valuation—receiver Current average
cr. Interorg Payable (sending org)
dr./cr.PPV—receiving org
dr. Interorg Receivable
cr. Subinventory Val—sender
Average Cost Recalculated? No, there is no PPV if receiving subinventory is
expense.
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Transaction: Receipt from Intransit (Standard org) into Average org— FOB
Receipt
Accounting Entries: dr. Subinventory Valuation—receiver Standard
cr. Interorg Payable
dr. Interorg Receivable
cr. Intransit Inventory
Average Cost Recalculated? No, same as standard asset to average (intransit
is an asset subinventory).
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Transaction: Receipt from Intransit (Average org) into Average org— FOB
Receipt
Accounting Entries: dr. Subinventory Valuation—receiver Current average
cr. Interorg Payable (sending organization)
dr. Interorg Receivable
cr. Intransit Inventory
Average Cost Recalculated? Yes, recalculation of average cost is not
applicable if receiving subinventory is expense.
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Transaction: Shipment to Intransit from Average org—FOB Receipt
Accounting Entries: dr. Intransit Inventory Current average
cr. Subinventory Valuation or Expense
Average Cost Recalculated? No, intransit is booked elementally, asset to
intransit washes.
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Transaction: Receipt from Intransit into Average org—FOB Shipment
Accounting Entries: dr. Subinventory Valuation or Expense Current average
cr. Intransit Inventory
Average Cost Recalculated? No, intransit to asset in and out of the same accounts.
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Transaction: Shipment to Intransit (Average org ) from Standard org asset
subinv—FOB Shipment
Accounting Entries: dr Intransit Inventory Standard
cr. Interorg Payable
dr. Interorg Receivable
cr. Subinventory Valuation—sender
Average Cost Recalculated? Yes.
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Transaction: Shipment to Intransit (Avg org) from Std org expense subinventory
—FOB Shipment
Accounting Entries:dr Intransit Inventory Standard
 cr. Interorg Payable
dr. Interorg Receivable
cr. Subinventory Valuation—sender
Average Cost Recalculated? Yes.
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Transaction: Shipment to Intransit (Avg) from Avg org—FOB Shipment
Accounting Entries:dr Intransit Inventory Current average
cr. Interorg Payable (sending organization)
dr. Interorg Receivable
cr. Subinventory Valuation—sender
Average Cost Recalculated? Yes, unit cost recalculated in receiving
organization.
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Transaction: Inventory Adj— cycle count or physical inv
Accounting Entries: dr./cr.Inventory Adjustments Current average
cr./dr.Subinventory Valuation
Average Cost Recalculated? No, same as current.
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Transaction: Sales Order Shipment
Accounting Entries: dr. Cost of Goods Sold Current average
cr. Subinventory Valuation
Average Cost Recalculated? No.
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Transaction: Receipt of Vendor Invoice
Accounting Entries: dr. A/P Accrual PO price
cr. Accounts Payable Invoice
dr/cr. IPV
Average Cost Recalculated? Not applicable.
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Transaction: Issue to Job from subinventory
Accounting Entries: dr. Work in Process Inv Current average
cr. Subinventory Valuation
Average Cost Recalculated? No, expense subinventory to expense job
carries no cost.
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Transaction: Component Return to subinventory
Accounting Entries: dr. Subinventory Valuation Current average
cr. Work in Process Inv
Average Cost Recalculated? No.
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Transaction: Charge Labor Resource to WIP job
Accounting Entries: dr. Work in Process Inv Actual
cr. Resource Absorption
Average Cost Recalculated? Not applicable. standard rate = No;
charge type = Manual; actual employee rate.
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Transaction: Charge Non-Labor Resource to WIP job
Accounting Entries: dr. Work in Process Inv User-defined
cr. Resource Absorption
Average Cost Recalculated? Not applicable. Pre-defined rate or actual rate.
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Transaction: Charge Overhead to WIP job
Accounting Entries: dr. Work in Process Inv Calculated OH
cr. Overhead Absorption
Average Cost Recalculated? Not applicable.
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Transaction: Charge Outside Processing to WIP job
Accounting Entries: dr. Work in Process Inv PO price
cr. OSP Resource Absorption
Average Cost Recalculated? Not applicable. standard rate = No.
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Transaction: Complete Assemblies
Accounting Entries: dr. Subinventory Valuation Calc avg +MOH
cr. Work in Process Inv calc avg
cr. Material OH Absorption calc’d MOH
Average Cost Recalculated? Yes, completion algorithm calculations based
on job charges.
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Transaction: Return Assemblies to WIP
Accounting Entries: dr. Work in Process Inv Average cost of
dr. Material OH Absorption job completions
cr. Subinventory Valuation
Average Cost Recalculated? Yes.
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Transaction: Scrap Assemblies from WIP
Accounting Entries: dr. Scrap Calculated
cr. Work in Process Inv
Average Cost Recalculated? Not applicable. If checkbox Require Scrap Account is
checked, scrap calcs are based on job charges
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Transaction: Reverse Scrap
Accounting Entries: dr. Work in Process Inv Average cost of job scrap
cr. Scrap
Average Cost Recalculated? No.
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Transaction: Close WIP Jobs
Accounting Entries: dr. Variance
cr. Work in Process Inv
Average Cost Recalculated? Not applicable. Entries only if job has a
residual
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Transaction: Average Cost Update
Accounting Entries: dr/cr. Subinventory Valuation User-specified
cr/dr. Inventory Adjustment
Average Cost Recalculated? Yes, enter % or amount of change, or new unit
cost.
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