Design Details - Accounts in the General Ledger

To reconcile inventory and capacity ledger entries with the general ledger, the related value entries are posted to different accounts in the general ledger. For more information, see Design Details: Reconciliation with the General Ledger.

From the Inventory Ledger

The following table shows the relationship between different types of inventory value entries and the accounts and balancing accounts in the general ledger.

Item Ledger Entry Type Value Entry Ttype Variance Type Expected Cost Account Balancing Account
Purchase Direct Cost Yes Inventory (Interim) Invt. Accrual Acc. (Interim)
Purchase Direct Cost No Inventory Direct Cost Applied
Purchase Indirect Cost No Inventory Overhead Applied
Purchase Variance Purchase No Inventory Purchase Variance
Purchase Revaluation No Inventory Inventory Adjmt.
Purchase Rounding No Inventory Inventory Adjmt.
Sale Direct Cost Yes Inventory (Interim) COGS (Interim)
Sale Direct Cost No Inventory COGS
Sale Revaluation No Inventory Inventory Adjmt.
Sale Rounding No Inventory Inventory Adjmt.
Positive Adjmt.,Negative Adjmt., Transfer Direct Cost No Inventory Inventory Adjmt.
Positive Adjmt.,Negative Adjmt., Transfer Revaluation No Inventory Inventory Adjmt.
Positive Adjmt.,Negative Adjmt., Transfer Rounding No Inventory Inventory Adjmt.
(Production) Consumption Direct Cost No Inventory WIP
(Production) Consumption Revaluation No Inventory Inventory Adjmt.
(Production) Consumption Rounding No Inventory Inventory Adjmt.
Assembly Consumption Direct Cost No Inventory Inventory Adjmt.
Assembly Consumption Direct Cost No Direct Cost Applied Inventory Adjmt.
Assembly Consumption Indirect Cost No Overhead Applied Inventory Adjmt.
(Production) Output Direct Cost Yes Inventory (Interim) WIP
(Production) Output Direct Cost No Inventory WIP
(Production) Output Indirect Cost No Inventory Overhead Applied
(Production) Output Variance Material No Inventory Material Variance
(Production) Output Variance Capacity No Inventory Capacity Variance
(Production) Output Variance Subcontracted No Inventory Subcontracted Variance
(Production) Output Variance Capacity Overhead No Inventory Cap. Overhead Variance
(Production) Output Variance Manufacturing Overhead No Inventory Mfg. Overhead Variance
(Production) Output Revaluation No Inventory Inventory Adjmt.
(Production) Output Rounding No Inventory Inventory Adjmt.
Assembly Output Direct Cost No Inventory Inventory Adjmt.
Assembly Output Revaluation No Inventory Inventory Adjmt.
Assembly Output Indirect Cost No Inventory Overhead Applied
Assembly Output Variance Material No Inventory Material Variance
Assembly Output Variance Capacity No Inventory Capacity Variance
Assembly Output Variance Capacity Overhead No Inventory Cap. Overhead Variance
Assembly Output Variance Manufacturing Overhead No Inventory Mfg. Overhead Variance
Assembly Output Rounding No Inventory Inventory Adjmt.

From the Capacity Ledger

The following table shows the relationship between different types of capacity value entries and the accounts and balancing accounts in the general ledger. Capacity ledger entries represent labor time consumed in assembly or production work.

Work Type Capacity Ledger Entry Type Value Entry Type Account Balancing Account
Assembly Resource Direct Cost Direct Cost Applied Inventory Adjmt.
Assembly Resource Indirect Cost Overhead Applied Inventory Adjmt.
Production Machine Center/Work Center Direct Cost WIP Account Direct Cost Applied
Production Machine Center/Work Center Indirect Cost WIP Account Overhead Applied

Assembly Costs are Always Actual

As shown in the table above, assembly postings are not represented in interim accounts. This is because the concept of work in process (WIP) does not apply in assembly output posting, unlike in production output posting. Assembly costs are only posted as actual cost, never as expected cost.

For more information, see Design Details: Assembly Order Posting.

Calculating the Amount to Post to the General Ledger

The following fields in the Value Entry table are used to calculate the expected cost amount that is posted to the general ledger:

The following table shows how the amounts to post to the general ledger are calculated for the two different cost types.

Cost Type Calculation
Actual Cost Cost Amount (Actual) – Cost Posted to G/L
Expected Cost Cost Amount (Expected) – Expected Cost Posted to G/L

See Also

Design Details: Inventory Costing
Design Details: Inventory Posting
Design Details: Expected Cost Posting
Managing Inventory Costs
Finance
Working with Dynamics NAV


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