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Procure To Pay Journal Entries for Inventory, Expenses, and Asset Items

 

In any business, items play a vital role. In Oracle applications, these items segregated into 3 types

  1. Inventory Items
  2. Expense Items
  3. Asset Items

 

1.Inventory Item :

Inventory Item are the items which we use in sales and purchases of our business

2.Expense Item :

Expense item which we use for Official Usage. Ex: Stationary, Furniture, Cleaning Materials, etc

3.Asset Item :

An item that we Depreciate and track as an asset in the Fixed Asset module



Below are the Journal entries for the above items

 

Journal entries for Inventory items

P2P Journal Entries for Inventory items

 

Debit

Credit


At time of Purchase Order

No Entry for PO. Because this is not at all having any financial

impact

     

Receiving Goods (GRN)

Inventory Receiving A/C Dr

To AP Accrual A/C

     

Goods Inspection

N/A

N/A

     

Delivering Goods

Material Cost A/C Dr

To Inventory Receiving A/C

     

Invoice (Matched to PO)

AP Accrual A/C Dr

To Accounts Payable A/C

     

At time of Payment

Accounts Payable A/C Dr

To Cash Clearing A/C

     

Reconciliation with Cash Management

Cash clearing A/C Dr

To Cash A/C

     

Issue Material to Stores

Expenses A/C Dr

Material Cost A/C



Journal entries for Expense items

P2P Journal Entries for Expense items

 

Debit

Credit


At time of Purchase Order

No Entry for PO. Because this is not at all having any financial

impact

     

Receiving Goods (GRN)

Inventory Receiving A/C Dr

To AP Accrual A/C

     

Goods Inspection

N/A

N/A

     

Delivering Goods

Expense A/C Dr

To Inventory Receiving A/C

     

Invoice (Matched to PO)

AP Accrual A/C Dr

To Accounts Payable A/C

     

At time of Payment

Accounts Payable A/C Dr

To Cash Clearing A/C

     

Reconciliation with Cash Management

Cash clearing A/C Dr

To Cash A/C





Journal entries for Asset items

P2P Journal Entries for Asset items

 

Debit

Credit


At time of Purchase Order

No Entry for PO. Because this is not at all having any financial impact

     

Receiving Goods (GRN)

Inventory Receiving A/C Dr

To AP Accrual A/C

     

Goods Inspection

N/A

N/A

     

Delivering Goods

Asset clearing A/C Dr

To Inventory Receiving A/C

     

Invoice (Matched to PO)

AP Accrual A/C Dr

To Accounts Payable A/C

     

At time of Payment

Accounts Payable A/C Dr

To Cash Clearing A/C

     

Reconciliation with Cash Management

Cash clearing A/C Dr

To Cash A/C

     

Transfer To Fixed Assets

Asset Cost A/C Dr

To Asset Clearing A/C

     

Depreciation

Depreciation A/C Dr

To Accumulated Depreciation A/c


Naveen Ravella

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Naveen Ravella

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