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Design Details: Accounts in the General Ledger

Microsoft Dynamics NAV 2013

To reconcile inventory and capacity ledger entries with the general ledger, the related value entries are posted to different accounts in the general ledger. For more information, see Design Details: Reconciliation with the General Ledger.

From the Inventory Ledger

The following table shows the relationship between different types of inventory value entries and the accounts and balancing accounts in the general ledger.

Value entry General ledger accounts

Item ledger entry type

Value entry type

Variance type

Expected cost

Account

Balancing account

Purchase

Direct Cost

Yes

Inventory (Interim)

Invt. Accrual Acc. (Interim)

Direct Cost

No

Inventory

Direct Cost Applied

Indirect Cost

No

Inventory

Overhead Applied

Variance

Purchase

No

Inventory

Purchase Variance

Revaluation

No

Inventory

Inventory Adjmt.

Rounding

No

Inventory

Inventory Adjmt.

Sale

Direct Cost

Yes

Inventory (Interim)

COGS (Interim)

Direct Cost

No

Inventory

COGS

Revaluation

No

Inventory

Inventory Adjmt.

Rounding

No

Inventory

Inventory Adjmt.

Positive Adjmt.,Negative Adjmt., Transfer

Direct Cost

No

Inventory

Inventory Adjmt.

Revaluation

No

Inventory

Inventory Adjmt.

Rounding

No

Inventory

Inventory Adjmt.

(Production) Consumption

Direct Cost

No

Inventory

WIP

Revaluation

No

Inventory

Inventory Adjmt.

Rounding

No

Inventory

Inventory Adjmt.

Assembly Consumption

Direct Cost

No

Inventory

Inventory Adjmt.

Direct Cost

No

Direct Cost Applied

Inventory Adjmt.

Indirect Cost

No

Overhead Applied

Inventory Adjmt.

(Production) Output

Direct Cost

Yes

Inventory (Interim)

WIP

Direct Cost

No

Inventory

WIP

Indirect Cost

No

Inventory

Overhead Applied

Variance

Material

No

Inventory

Material Variance

Variance

Capacity

No

Inventory

Capacity Variance

Variance

Subcontracted

No

Inventory

Subcontracted Variance

Variance

Capacity Overhead

No

Inventory

Cap. Overhead Variance

Variance

Manufacturing Overhead

No

Inventory

Mfg. Overhead Variance

Revaluation

No

Inventory

Inventory Adjmt.

Rounding

No

Inventory

Inventory Adjmt.

Assembly Output

Direct Cost

No

Inventory

Inventory Adjmt.

Revaluation

No

Inventory

Inventory Adjmt.

Indirect Cost

No

Inventory

Overhead Applied

Variance

Material

No

Inventory

Material Variance

Variance

Capacity

No

Inventory

Capacity Variance

Variance

Capacity Overhead

No

Inventory

Cap. Overhead Variance

Variance

Manufacturing Overhead

No

Inventory

Mfg. Overhead Variance

Rounding

No

Inventory

Inventory Adjmt.

From the Capacity Ledger

The following table shows the relationship between different types of capacity value entries and the accounts and balancing accounts in the general ledger. Capacity ledger entries represent labor time consumed in assembly or production work.

Value entry General ledger accounts

Work type

Capacity ledger entry type

Value entry type

Account

Balancing account

Assembly

Resource

Direct Cost

Direct Cost Applied

Inventory Adjmt.

Assembly

Resource

Indirect Cost

Overhead Applied

Inventory Adjmt.

Production

Machine Center/Work Center

Direct Cost

WIP Account

Direct Cost Applied

Production

Machine Center/Work Center

Indirect Cost

WIP Account

Overhead Applied

Assembly Costs are Always Actual

As shown in the table above, assembly postings are not represented in interim accounts. This is because the concept of work in process (WIP) does not apply in assembly output posting, unlike in production output posting. Assembly costs are only posted as actual cost, never as expected cost.

For more information, see Design Details: Assembly Order Costing.

Calculating the Amount to Post to the General Ledger

The following fields in the Value Entry table are used to calculate the expected cost amount that is posted to the general ledger:

  • Cost Amount (Actual)

  • Cost Posted to G/L

  • Cost Amount (Expected)

  • Expected Cost Posted to G/L

The following table shows how the amounts to post to the general ledger are calculated for the two different cost types.

Cost type Calculation

Actual Cost

Cost Amount (Actual) Cost Posted to G/L

Expected Cost

Cost Amount (Expected) Expected Cost Posted to G/L

See Also

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