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Cost/Bill states and ledger entries example for different scenarios.
Cost/Bill states and ledger entries example for different scenarios.
A
Written by Ahmed Shabib
Updated over a week ago

Costings modify the following books:

1) Transaction types

  • Account payable sub-ledger of the vendor

  • Expense Book

  • Input Tax Books

2) Other Behavior:

  • Cost/Bill Date defaults to the date of creation.

3) Selecting Recognize Cost only after sales invoice is generated(Invoice Date) checkbox in cost/bill

  • Selecting the above checkbox will make sure the cost is recognized under expense books only after invoice for the corresponding shipment is issued. And the recognition is on the same date as the invoice date. If there are multiple invoices it picks the first invoice associated with the job.

4) Ledger Entries Example for different scenarios:

  • Scenario 1:

Cost State : Approved

Cost Date : Before Customer Invoice Date

Recognize Cost only after sales invoice is generated(Invoice Date) checkbox : Selected

We have two entries in the ledger corresponding to above scenario.

Cost Date

AP : Credit

Deferred Expense (Asset) : Debit

Customer Invoice Date

Deferred Expense (Asset) : Credit

Expense Book(Expense) : Debit

  • Scenario 2:

Cost State : Approved or Under Review/Costs Finalized

Cost Date : After Customer Invoice Date (Future Cost)

Recognize Cost only after sales invoice is generated(Invoice Date) checkbox : Selected

We have two entries in the ledger corresponding to above scenario.

Cost Date (Only If the Cost is Approved)

AP : Credit

Accrued Expense (Liability) : Debit


Customer Invoice Date

Accrued Expense (Liability) : Credit

Expense Book(Expense) : Debit

  • Scenario 3:

Cost State : Approved

Cost Date : Any Date

Recognize Cost only after sales invoice is generated(Invoice Date) checkbox : Unselected

We have two entries in the ledger corresponding to above scenario.

Cost Date (If the Cost is Approved)

AP : Credit

Expense Book(Expense) : Debit

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