Technical support memos


May 8, 1997
Going negative - cost of goods sold tracking
Advanced Accounting (all versions)
Tony Frates (Copyright 1997 Addsum Business Software, Inc.)

Advanced Accounting uses an average costing approach in valuing inventory and therefore in posting cost of goods sold. When an invoice is posted where there are/were sufficient quantities on hand, the system will post out cost of goods sold to the general ledger based on the average cost at the time the invoice is printed and will update the line item fields.

The system "saves" the cost of goods sold information not only in the general ledger files BKGLTRAN and BKGLCOA but also saves it in the sales files BKARINVL and BKARINV. When a sales order matures into an invoice, the sales information is moved into corresponding files BKARHIVL and BKARHINV each of which has the same data field layouts as BKARINVL and BKARINV respectively. In the line item file, the field BKAR.INVL.PCOGS contains the unit cost for one item. In the header file, the field BKAR.INV.COGS contains the grand total of all cost of goods sold amounts for the header.

When a user forces an item to "go negative," the system does not have the information it otherwise needs to compute cost of goods sold when an order is posted as an invoice. Consequently, the cost of goods sold for an item when posted could be zero and the cost of goods sold for the entire order could be zero or less than what it actually should be. Under these circumstances, cost of goods sold would not be reflected in the general ledger nor in the sales history files.

When an item is received on a purchase order that has a negative quantity, the system attempts to make a cost of goods sold entry (again on the average cost basis so timing can be everything) to rectify the fact that previously when the invoice was posted, an entry could not be made to cost of goods sold because of having gone negative. The sales history files however would not be updated in this process.

Consequently, any reporting information based off the cost of goods sold fields BKAR.INVL.PCOGS nor BKAR.INV.COGS will ever be accurate if inventory codes are forced to "go negative."

Copyright © 1997 Addsum Business Software, Inc.
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