Accounting Entries for MM, FI related

• What should be my accounting entry in procurement?

     For Domestic Procurement of Raw Material

            During GR

                                    Material Stock             Dr.

                                    GR/IR clearing                        Cr.

            During Excise Invoice Credit            

                                    Cenvat Account          Dr.

                                    Cenvat Clearing                      Cr.

            During Invoice Verification

                                    Cenvat Clearing          Dr.

                                    GR/IR Clearing           Dr.

                                    Vendor Payable                      Cr.

 

For Domestic procurement of Capital Goods

           

During GR

                                    Material Stock             Dr.

                                    GR/IR clearing                        Cr.

            During Excise Invoice Credit            

                                    Cenvat Account          Dr.       (50%)

                                    Cenvat On-hold          Dr.       (50%)

                                    Cenvat Clearing                      Cr.

            During Invoice Verification

                                    Cenvat Clearing          Dr.

                                    GR/IR Clearing           Dr.

                                    Vendor Payable                      Cr

Subsequent of Capital Goods

                                    Cenvat Account          Dr.       (50%)

                                    Cenvat On-hold                      Cr.       (50%)

 

For Import Procurement of Raw Material

                       

            During Customs Duty Clearing invoice

                                    Custom Clearing         Dr.

                                    Custom Payable                      Cr.

            During GR

                                    Material Stock             Dr.

                                    GR/IR clearing                        Cr.

            During Excise Invoice Credit            

                                    Cenvat Account          Dr.      

                                    Custom Clearing                     Cr.

            During Invoice Verification

                                    GR/IR Clearing           Dr.

                                    Vendor Payable                      Cr.

 

 

 

For Excise Duty Credit of Raw Material without PO

                       

                                    Cenvat Account          Dr.      

                                    Cenvat Clearing                      Cr.

 

 

For Excise Duty Reversal through Excise JV

                       

                                    Cenvat Clearing          Dr.      

                                    Cenvat Account                      Cr.

 

• What should be my accounting entry when the goods are issued through MM and excise invoice is created (J1IS & J1IV)?

     During Excise Invoice Creation

                        Cenvat Suspense Account      Dr.

                        Cenvat payable                                   Cr.

 

For TR6C Challan

PLA Account              Dr.

PLA on hold Account             Cr.

 

During Fortnightly  Utilization

Cenvat payable            Dr.

Cenvat Account                      Cr.

PLA Account                          Cr.

 

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.

 

  

• What should be my accounting entry in subcontracting reversal / Recredit?

For Subcontracting Challan Reversal

                        Cenvat Reversal          Dr.

                        Cenvat Account                      Cr.

For Subcontracting Challan Recredit

                        Cenvat Account          Dr.

                        Cenvat Reversal                      Cr.

 

• What should be my accounting entry in SD ?

For  Factory Sale

 

During Billing Document

                        Customer Account                  Dr.

                        Sales Account                                     Cr.

                        Cenvat Suspense Account                  Cr.

 

During Excise Invoice Creation

                        Cenvat Suspense Account      Dr.

                        Cenvat payable                                   Cr.

 

For TR6C Challan

PLA Account              Dr.

PLA on hold Account             Cr.

 

During Fortnightly  Utilization

Cenvat payable            Dr.

Cenvat Account                      Cr.

PLA Account                          Cr.

 

For  Stock Transfer through SD

           

No Accounting entries for Performa Billing Document

 

During Excise Invoice Creation

                        Cenvat Suspense Account      Dr.

                        Cenvat payable                                   Cr.

 

For TR6C Challan

PLA Account              Dr.

PLA on hold Account             Cr.

 

During Fortnightly  Utilization

Cenvat payable            Dr.

Cenvat Account                      Cr.

PLA Account                          Cr.

 

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.

Accounting Entries related to MM transactions...

Initial stock entry:

Movement type - 561(Receipt per initial entry of stock balances into unrestricted-use)

TCODE - MB1C

FI Document Type - WA

89	Raw material	BSX		S
91	Initial Stock entry	GBB	BSA	H

Physical inventory differences:

Movement type – 702 (Goods Issue – Physical Inventory difference) this is triggered because of the movement type 102, which is given while calculating the difference – INV: for expenditure/income from inventory differences

TCODE - MI07 (MI01 & MI04)

FI Document Type - WI

81	Inventory differences – G/L	GBB	INV	S
99	Raw material	BSX		H

Goods Issue to Production Order:

Movement type - 261 (Consumption for order from warehouse) – VBR: for internal goods issues (for example, for cost center)

TCODE - MB1A

FI Document Type - WA: Goods Issue

81	Raw material Consumption	GBB	VBR	S
99	Raw material	BSX		H

In case Movement type given is 201(Consumption for cost center from warehouse), at the time of MB1A system asks for the COST CENTER & GENERAL LEDGER. Here, the account determination happens directly from MB1A and not from the OBYC. Accounting entry will be same as above except the 'Raw material Consumption'; it triggers whatever the GL given.

Goods Issue / Delivery: SD

Movement type - 601 (Customer delivery) – VAX: for goods issues for sales orders without account assignment object (the account is not a cost element)

TCODE - VL02

FI Document Type - WL: Goods Issue/Delivery

81	Mater. consumed/trading goods without cost element COGS	GBB	VAX	S
99	Finished Goods	BSX		H

Goods Receipt: FG PP

Movement type - 101 (Goods Receipt) – GBB-AUF: for goods receipts for orders (without account assignment) and for order settlement if AUA is not maintained

TCODE - MB31 Goods Receipt for Production Order

FI Document Type - WE: Goods Receipt

89	Finished Goods	BSX		S
91	Inventory change – factory output COGP	GBB	AUF	H

Goods Receipt: RM MM

Movement type - 101 (Goods Receipt)

TCODE - MIGO Goods Receipt for Purchase Order

FI Document Type - WE: Goods Receipt

89	Raw Material	BSX		S
96	GR / IR Clearing account	WRX		H

Invoice Receipt: RM MM

Movement type - 101 (Goods Receipt)

TCODE - MIGO Goods Receipt for Purchase Order

FI Document Type - WE: Goods Receipt

86	GR / IR Clearing account	WRX		S
31	Vendor account	KBS		H

KBS – is without any account determination and posting keys are 81 & 91. It triggers when there is no material is assigned in the PO at that time.

WRX – In case of any posting required without material, account determination should be without valuation class.

If price changed at the time of IR, then based on the difference in the material price system posts amounts to particular material account and not to the price difference account (this is related to the materials with price control – V).

Material Valuation: MM

Movement type -

TCODE - MR22 Dr/Cr Material – material valuation (below given calculation) & MR21: Price Change (Difference amount posts to the material account and calculation is ((New price – Old price) * Quantity)

FI Document Type - PR: Price change – Below entry in case of price increase

89	Raw material	BSX		S
93	Material Valuation	UMB		H

Calculation - {Current Stock Value + (Amount given in MR22 / Quantity given in MR22 * Cr. Quantity)}

Billing Document: SD

TCODE - VF01 Billing - VF11 Cancel Billing

FI Document Type - RV: Billing document transfer - RW: Reversal of billing

01	Customer account	BSX		S
50	Sales Revenue account	UMB		H