When you purchase inventory items, those items are automatically added to the perpetual inventory figures maintained in the system. For various reasons, you may wish to modify the inventory information thus created. You might discover that an item has been entered incorrectly, or you may wish to adjust your figures for loss or breakage, or you may wish to account for inventory which has been purchased in one form and then processed in some way before being sold in a different form. For such purposes, you will want to use the Processing Room form (Figure 61) found under Purchasing Processing Room Entry.

You can enter a number in the Journal Number field or you can click the New button to the right of the Journal Number field and the system will assign the next inventory journal number based on the last number used (system assigned numbers begin with “IJ1001”). You then enter the Entry Date and a descriptive Comment of some sort, if necessary.

Most of the rest of the Processing Room form is made up of three grids labelled Raw Materials, Labor and Overhead, and Finished Goods.

Using these three grids you can record the processing of raw inventory items into processed inventory items. In the Raw Materials grid you will record the quantities of items that were used in the process, and your inventory levels will be adjusted for the quantities and the Extended amount to the right will be credited to the inventory G/L. In the Finished Goods grid you will record the new inventory items created by the process, and your inventory levels will be increased for these items and your inventory G/L debited (increased) by the Extended amount. The difference will be coded to an expense G/L in the Labor and Overhead grid in the middle. Other types of inventory transfers or adjustments can be made in a similar fashion.

Once you have posted the journal entry, you can print the Inventory Transfer Journal (Figure 62) and the Inventory Transfer G/L Distribution (Figure 63) report found under Reports Purchasing Reports Inventory Transfer Journal to view the impact of your entry on the accounting system. The Inventory Transfer G/L Distribution will be printed along with the Inventory Transfer Journal if you select the Include G/L Distribution checkbox on the print setup form.

The G/L distribution page is an option on several reports, as we will see, and it allows you to see exactly how the activity on the report impacts the general ledger. The G/L distribution is always the last page of the report when the option of printing it is selected.

Purchase Orders

TOC

Accounts Payable and Disbursements