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Direct Inter-Org Transactions: Standard Costing / Average Cost

Direct inter-org transactions allow organizations to directly transfer inventory between each other. When a transfer occurs, the sending organization debits an inter-org receivables account at standard cost plus any transfer or transportation costs, and credits inventory valuation and inter-org transfer accounts. The receiving organization credits inventory valuation and debits an inter-org payables account at the sending organization's receivables amount, and may debit overhead absorption accounts.

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Mohammed Abdelfttah Mustafa
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47 views

Direct Inter-Org Transactions: Standard Costing / Average Cost

Direct inter-org transactions allow organizations to directly transfer inventory between each other. When a transfer occurs, the sending organization debits an inter-org receivables account at standard cost plus any transfer or transportation costs, and credits inventory valuation and inter-org transfer accounts. The receiving organization credits inventory valuation and debits an inter-org payables account at the sending organization's receivables amount, and may debit overhead absorption accounts.

Uploaded by

Mohammed Abdelfttah Mustafa
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Direct Inter-org Transactions

  TRANSACTION_SOURCE_TYPE   TRANSACTION_TYPE   TRANSACTION_ACTION


8 Internal order 54 Int Order Direct Ship 3 Direct organization transfer
13 Inventory 3 Direct Org Transfer 3 Direct organization transfer
Standard Costing/Average Cost

Sending organization: Asset Item and Asset Sub inventory:


Account Org Debit Credit
Inter-org Receivables account @ standard cost/Actual Cost + MMT.transfer_cost +
MMT.transportation_cost Send XX
Inventory Valuation accounts @ standard cost Send XX
Inter-org Transfer Credit account @ MMT.transfer_cost Send XX
Transportation Distribution account @ MMT.transportation_cost Send XX

Receiving organization: Asset Item and Asset Subinventory:


Account Org Debit Credit
Inventory Valuation accounts @ standard cost Recv XX
Interorg Payables account @ sending org’s interorg receivables amount Recv XX
Overhead Absorption accounts @ overhead cost Recv XX
Debit/Credit Interorg Purchase Price Variance account Recv XX XX

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