Purchase order accounting entries
I've spent a good chunk of my day trying to unravel a messy purchase order situation and wanted to make sure I'm not going mad.
The way I see it the whole purchase order thing should work a little like this:-
- PO is raised for goods and services - No impact on accounting records
- Goods and received and in good order etc etc - DR to P&L expense, CR to accruals in the balance sheet
- Invoice comes in from supplier - DR the accrual above, CR Supplier/Purchase ledger
I guess my question is two fold......
1. am i right in saying no entry should hit the accounting records until the goods are received (the accrual stage above)
2. shouldnt a fully integrated system such as SAP, Oracle etc etc create that accrual for you (and subsequently get rid of it when the supplier invoice is matched)
The records im looking at just now show maual accruals for goods received where no invoice has been received and I'm begining to panic a little.
Can someone at least tell me that my theory is sound?
I need a drink................
Thanks in advance!
- Client Death 201 2
- Coding notices post P11d 1,841 12
- Tax position re this lease? 182 3
- Preference shares redeemed at less than par 226 12
- Fixed Assets 282 5
- Normal trading company or property management company for CT600? 139 1
- What are options for non CA firm 1,681 26
- Do I need to pay Capital Gain Tax 566 24
- Real names 1,173 35
- Hive up - accounting and notes to financial statements 83 1
- What do "Former Contracted Out" rebates mean 155 2
- Director salary from company limited by guarantee 260 8
- Dividends with an annual profit but retained losses 184 1
- Anyone come across this shower before? 1,939 35
- What are the tax implications of employer paying my tuition fees? 219 1
- Company Secretarial Software 1,390 30
- Do I need to report this to SOCA 718 9
- Proceeds of Overseas Property Sale - Any Tax Implications 250 7
- FRS to standard - check my understanding 154 2
- Tick & Bash Bristol 333 5
- Proposed Amendments to IAS 1 585
- Property exchange - 8-year legal delay following fall-out 456
- Accounting for Insurance Premium Financing 355
- IFA incorporation 340
- Sorry ignore me 328
- Moving into own BTL property - allowable costs 282
- Will Ni be payable on the salary I receive abroad ? 275
- SAGE Payroll Data for Import to MS Dynamics AX 265
- Cancelled 208
- property ownership between husband wife three taxpayers 179