Update Stock to Nominal (Examples)

The following tables give examples of, what might be deemed to be, a typical set-up. They use the Analysis records and Nominal Ledger account codes from the Access Standard Company chart of accounts.

Without Update Stock to Nominal

The double entry for a transaction without using Update Stock to Nominal is as follows.

Buying Stock via POP	Analysis	Debit	Credit
Batched Purchase Order.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.
Receipt of goods ordered.	The physical Stock is increased to record the delivery of goods into Stock.	The physical Stock is increased to record the delivery of goods into Stock.	The physical Stock is increased to record the delivery of goods into Stock.
Purchase Invoice posted.	Purchase type analysis -20100 Default Purchases	20100 Default Purchases in the Profit & Loss Account 83100 VAT Control if appropriate	81100 Creditors Control in the Balance Sheet
In this way the full cost of any stock purchased will be charged to the Profit and Loss account.	In this way the full cost of any stock purchased will be charged to the Profit and Loss account.	In this way the full cost of any stock purchased will be charged to the Profit and Loss account.	In this way the full cost of any stock purchased will be charged to the Profit and Loss account.
Selling Stock via SOP	Analysis	Debit	Credit
Batched Sales Order.
Delivery of the goods sold.	The physical Stock is decreased to record the delivery of goods out of Stock.	The physical Stock is decreased to record the delivery of goods out of Stock.	The physical Stock is decreased to record the delivery of goods out of Stock.
Sales Invoice posted	Sales type analysis - 10110 Default Sales	73100 Debtors Control in the Balance Sheet	10110 Default Sales in the Profit & Loss account 83100 VAT Control if appropriate
At the end of the month, if there are un-sold purchases held in Stock, you might wish to enter a reversing journal to reduce the amount charged to Default Purchases in the Profit & Loss account and increase Assets in the Balance Sheet with the value of the Stock.	At the end of the month, if there are un-sold purchases held in Stock, you might wish to enter a reversing journal to reduce the amount charged to Default Purchases in the Profit & Loss account and increase Assets in the Balance Sheet with the value of the Stock.	At the end of the month, if there are un-sold purchases held in Stock, you might wish to enter a reversing journal to reduce the amount charged to Default Purchases in the Profit & Loss account and increase Assets in the Balance Sheet with the value of the Stock.	At the end of the month, if there are un-sold purchases held in Stock, you might wish to enter a reversing journal to reduce the amount charged to Default Purchases in the Profit & Loss account and increase Assets in the Balance Sheet with the value of the Stock.

With Update Stock to Nominal

With Update Stock to Nominal switched on, the double entry for a transaction is as follows.

Buying Stock via POP	Analysis	Debit	Credit
Batched Purchase Order.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.	Committed value for 20100 Default Purchases in the Profit & Loss Account is increased.
Receipt of goods ordered.	Stock type analysis - 76100 Receipt of Stock	76100 Stock Control in the Balance Sheet	82150 Goods Received Not Invoiced (GRNI) in the Balance Sheet
Purchase Invoice posted.	Purchase type analysis - 20100 Default Purchases	82150 Goods Received Not Invoiced (GRNI)- in the Balance Sheet. 83100 VAT Control if appropriate	81100 Creditors Control in the Balance Sheet
No costs have been charged to the Profit and Loss account, the value of the Stock purchased has been added to the Balance Sheet assets.	No costs have been charged to the Profit and Loss account, the value of the Stock purchased has been added to the Balance Sheet assets.	No costs have been charged to the Profit and Loss account, the value of the Stock purchased has been added to the Balance Sheet assets.	No costs have been charged to the Profit and Loss account, the value of the Stock purchased has been added to the Balance Sheet assets.

Selling Stock via SOP	Analysis	Debit	Credit
Batched Sales Order.
Delivery of the goods sold.	Stock type analysis 76100 Transfer of Cost of Sales Value	23150 Cost of Goods Sold in the Profit & Loss account	76100 Stock Control in the Balance Sheet
Sales Invoice posted	Sales type analysis - 10110 Default Sales	73100 Debtors Control in the Balance Sheet	10110 Default Sales in the Profit & Loss account 83100 VAT Control if appropriate
Only the Cost of Goods sold has been charged to the Profit and Loss account. The Stock value in the Balance Sheet has been reduced.	Only the Cost of Goods sold has been charged to the Profit and Loss account. The Stock value in the Balance Sheet has been reduced.	Only the Cost of Goods sold has been charged to the Profit and Loss account. The Stock value in the Balance Sheet has been reduced.	Only the Cost of Goods sold has been charged to the Profit and Loss account. The Stock value in the Balance Sheet has been reduced.

POP and SOP Credit Notes

Purchase Order and Sales Order Credit notes follow the process shown above but for negative values.

For Example, POP Credit Note with Update Stock to Nominal:

At the point of despatch of Stock being returned, the Stock type analysis code will record the reduction in the stock.

When the Credit note is posted, the Purchase type analysis code will record the reduction in liability by reducing the Creditors Control in the Balance Sheet (and the VAT Control if appropriate).

Differences between Order Value and Invoice Value

When processing Purchase orders, it would appear that any difference between the Order value and the Invoice value will result in a balance on the GRNI account. To stop this from happening, the two values are compared and an adjustment journal created to balance the GRNI account and to correct the Stock Valuation.

If the Invoice value is greater than the Order value: Dr Stock Adjustment A/C (increase B/S value) Cr GRNI (B/S)

If the Invoice value is less than the Order value: Dr GRNI (B/S) Cr Stock Adjustment A/C (decrease B/S value)

Where a Currency other than Home has been used and there has been a price and/or Exchange rate change, then the whole currency difference is posted as the currency equivalent.

Example:

	Balance Sheet (Home)	Balance Sheet (Home)	Balance Sheet (US$)	Balance Sheet (US$)
	Dr	Cr	Dr	Cr
Deliver 10 items at £10; Exchange rate £1 : $1.5	Deliver 10 items at £10; Exchange rate £1 : $1.5	Deliver 10 items at £10; Exchange rate £1 : $1.5	Deliver 10 items at £10; Exchange rate £1 : $1.5	Deliver 10 items at £10; Exchange rate £1 : $1.5
Dr 76100 Stock Control	100.00		150.00
Cr 82150 GRNI		100.00		150.00
Invoice 10 items at £12; Exchange rate £1 : $1.6667	Invoice 10 items at £12; Exchange rate £1 : $1.6667	Invoice 10 items at £12; Exchange rate £1 : $1.6667	Invoice 10 items at £12; Exchange rate £1 : $1.6667	Invoice 10 items at £12; Exchange rate £1 : $1.6667
Dr 82150 GRNI	120.00		200.00
Dr 83100 VAT Control	21.00		35.00
Cr 81100 Creditors Control		141.00		235.00
Price Adjustment £20/$50	Price Adjustment £20/$50	Price Adjustment £20/$50	Price Adjustment £20/$50	Price Adjustment £20/$50
Dr 76150 Stock Adjustment	20.00		50.00
Cr 82150 GRNI		20.00		50.00

A Variance Report is provided to enable you to track these adjustments and to reconcile Stock valuations to Balance Sheet Accounts. The report is found in Reports and is only available if the System option Update Stock to Nominal has been selected.

In the Stock Enquiry window, Price adjustment detail lines are displayed with a type of PA. You can adjust the List Definition for the Enquiry window to display Adjustments only if this assists in locating the transactions you wish to view.

Price and Text Items

Price and text entries on Sales Orders and Purchase Orders are processed using Purchase Type Analysis codes only and do not affect the Balance Sheet Stock values.

Example: Price and Text items on Sales Orders

Batched Sales Order.	Analysis	Debit	Credit
Sales Order processed	Sales type analysis - 10110 Default Sales	73100 Debtors Control in the Balance Sheet	10150 Sales Price/Text type in the Profit & Loss account 83100 VAT Control if appropriate
No costs have been charged to the Profit and Loss account.	No costs have been charged to the Profit and Loss account.	No costs have been charged to the Profit and Loss account.	No costs have been charged to the Profit and Loss account.