| Description |
This issue relates to i21 Help Desk ticket. Click the link below to go to Help Desk ticket.
[HDTN-222403 - Inventory out of balance to GL 11/30|https://helpdesk.irely.com/iRelyi21live//#/HD/Ticket/?ticket=HDTN-222403]
*Scenario:*
These returns are not connected with the original receipt. So the cost of the receipt is unknown.
Here the return should be treated as negative inventory adjustment with a dollar receivable.
The receivable will be the cost entered by the user as return. If there is difference between this cost and cost from costing method, it should be booked as expense.
It is also possible the item can be returned at a different cost due to restocking fee or something like that. Again it is an expense which is hard to bind to an account.
Using this example,
* IR-1
** Receive 10 boxes of soap @ $10 per box.
* IR-2
** Return 2 boxes of soap @ $11 per box.
* Valuation for return = -2 x $10 (from cost bucket) = -$20
* AP Clearing = -2 x $11 (from IR) = -$22
* Difference = -$2
GL entries
* Cr Inventory $20
* Dr AP Clearing $22
* Cr Inv Adj $2
IC entries
* Return = -2 x $10 (from cost bucket) = -$20
* Adj Entry = -$2
Putting a return that is not linked to an original cost is similar to a negative adjustment and would make sense.
*Research:*
[https://accountinginfocus.com/financial-accounting/inventory/inventory-returns-and-allowances/]
[https://www.odoo.com/documentation/user/9.0/accounting/others/inventory/avg_price_valuation.html]
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