Transactions and Distributions in an Average Cost Organization Transaction Unit Cost:

Transaction: PO ReceiptAccounting Entries: dr. Receiving Inspection PO price

cr. A/P AccrualAverage Cost Recalculated? No, same as current.--------------------------------------------------------------------------------------------Transaction:PO Delivery to subinventoryAccounting Entries: dr. Subinventory Valuation PO price +MOH

cr. Receiving Inspection PO price cr. Material OH Absorption calc’d MOH

Average Cost Recalculated? Yes.--------------------------------------------------------------------------------------------Transaction: Adjustment to PO Delivery Accounting Entries: dr./cr.Subinventory Valuation PO price +MOH

cr./dr.Receiving Inspection PO price cr./Material OH Absorption calc’d MOH

Average Cost Recalculated? No. OK for adjustment to be @ different rate from original transaction rate

--------------------------------------------------------------------------------------------Transaction: Return to Receiving from subinventory Accounting Entries: dr. Receiving Inspection PO price

dr. Material OH Absorption MOH cr. Subinventory Valuation PO price +MOH

Average Cost Recalculated? Yes, if MOH had changed since receipt, must use original rate— DOCUMENT.

--------------------------------------------------------------------------------------------Transaction: Return to Vendor from Receiving Inspection Accounting Entries: dr. A/P Accrual PO price

cr. Receiving Inspection Average Cost Recalculated? No.--------------------------------------------------------------------------------------------Transaction: Subinventory Transfer—asset subinventory to asset subinventory Accounting Entries: dr. Subinventory Valuation— receiver Current average

cr. Subinventory Valuation—sender Average Cost Recalculated? No, in and out of same accounts.--------------------------------------------------------------------------------------------Transaction: Subinventory Transfer—expense subinventory to expense subinventoryAccounting Entries: No entries

Average Cost Recalculated? Not applicable, only quantities are impacted.--------------------------------------------------------------------------------------------Transaction: Subinventory Transfer—asset to expense or vice verse Accounting Entries: dr. Subinventory Valuation or Expense—receiver

cr. Subinventory. Valuation or Expense—sender

Average Cost Recalculated? No.--------------------------------------------------------------------------------------------

Transaction: Miscellaneous Receipt Accounting Entries: dr. Subinventory Valuation Current average or U.S.

cr. User-specified Account Current average or user-specified (U.S.)

Average Cost Recalculated? Yes, if user overrides, new average is calculated.

--------------------------------------------------------------------------------------------Transaction: Miscellaneous Issue Accounting Entries: dr. User-specified Account Current average or U.S.

cr. Subinventory Valuation Average Cost Recalculated? Yes, if user overrides, new average is

calculated.--------------------------------------------------------------------------------------------Transaction: RMA Receipt Accounting Entries: dr. Subinventory Valuation Average cost of original

shipments on sales order line

cr. Cost of Goods Sold Average Cost Recalculated?Y es, if reference to sales order line exists.--------------------------------------------------------------------------------------------Transaction: RMA Return Accounting Entries: dr. Cost of Goods Sold Current average

cr. Subinventory Valuation Current average Average Cost Recalculated? No.--------------------------------------------------------------------------------------------Transaction: Direct Interorg Transfer—expense to expense Accounting Entries: No entries

Average Cost Recalculated? Not applicable. Applies to both standard and average organizations.

-------------------------------------------------------------------------------------------Transaction: Direct Interorg Transfer— Std org to Average org except expense to expense Accounting Entries: dr. Subinventory Valuation—receiver Standard cr. Interorg Payable

dr. Interorg Receivable cr. Subinventory Valuation—sender

Average Cost Recalculated? Yes, recalculation of average cost is not applicable if receiving subinventory is expense.

-------------------------------------------------------------------------------------------Transaction: Direct Interorg Transfer— Average org to Average org excluding exp to expense Accounting Entries: dr. Subinventory Valuation—receiver Current average cr. Interorg Payable (sending org)

dr. Interorg Receivable cr. Subinventory Valuation—sender

Average Cost Recalculated? Yes, (receiving org) recalculation of average cost is not applicable if receiving subinventory is expense.

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Transaction: Direct Interorg Transfer— Average org to Standard org excluding expense to expense Accounting Entries: dr. Subinventory Valuation—receiver Current average cr. Interorg Payable (sending org)

dr./cr.PPV—receiving orgdr. Interorg Receivablecr. Subinventory Val—sender

Average Cost Recalculated? No, there is no PPV if receiving subinventory is expense.

--------------------------------------------------------------------------------------------Transaction: Receipt from Intransit (Standard org) into Average org— FOB Receipt Accounting Entries: dr. Subinventory Valuation—receiver Standard cr. Interorg Payable

dr. Interorg Receivable cr. Intransit Inventory

Average Cost Recalculated? No, same as standard asset to average (intransit is an asset subinventory).

--------------------------------------------------------------------------------------------Transaction: Receipt from Intransit (Average org) into Average org— FOB Receipt Accounting Entries: dr. Subinventory Valuation—receiver Current average cr. Interorg Payable (sending organization)

dr. Interorg Receivable cr. Intransit Inventory

Average Cost Recalculated? Yes, recalculation of average cost is not applicable if receiving subinventory is expense.

--------------------------------------------------------------------------------------------Transaction: Shipment to Intransit from Average org—FOB Receipt Accounting Entries: dr. Intransit Inventory Current average

cr. Subinventory Valuation or ExpenseAverage Cost Recalculated? No, intransit is booked elementally, asset to

intransit washes.--------------------------------------------------------------------------------------------Transaction: Receipt from Intransit into Average org—FOB Shipment Accounting Entries: dr. Subinventory Valuation or Expense Current average

cr. Intransit InventoryAverage Cost Recalculated? No, intransit to asset in and out of the same accounts.--------------------------------------------------------------------------------------------Transaction: Shipment to Intransit (Average org ) from Standard org asset subinv—FOB Shipment Accounting Entries: dr Intransit Inventory Standard

cr. Interorg Payabledr. Interorg Receivablecr. Subinventory Valuation—sender

Average Cost Recalculated? Yes.--------------------------------------------------------------------------------------------Transaction: Shipment to Intransit (Avg org) from Std org expense subinventory—FOB Shipment Accounting Entries:dr Intransit Inventory Standard

cr. Interorg Payabledr. Interorg Receivablecr. Subinventory Valuation—sender

Average Cost Recalculated? Yes.--------------------------------------------------------------------------------------------Transaction: Shipment to Intransit (Avg) from Avg org—FOB Shipment Accounting Entries:dr Intransit Inventory Current average

cr. Interorg Payable (sending organization)dr. Interorg Receivablecr. Subinventory Valuation—sender

Average Cost Recalculated? Yes, unit cost recalculated in receiving organization.

--------------------------------------------------------------------------------------------Transaction: Inventory Adj— cycle count or physical inv Accounting Entries: dr./cr.Inventory Adjustments Current average

cr./dr.Subinventory ValuationAverage Cost Recalculated? No, same as current.--------------------------------------------------------------------------------------------Transaction: Sales Order Shipment Accounting Entries: dr. Cost of Goods Sold Current average

cr. Subinventory ValuationAverage Cost Recalculated? No.--------------------------------------------------------------------------------------------Transaction: Receipt of Vendor Invoice Accounting Entries: dr. A/P Accrual PO price

cr. Accounts Payable Invoice dr/cr. IPV

Average Cost Recalculated? Not applicable.--------------------------------------------------------------------------------------------Transaction: Issue to Job from subinventory Accounting Entries: dr. Work in Process Inv Current average

cr. Subinventory ValuationAverage Cost Recalculated? No, expense subinventory to expense job

carries no cost. --------------------------------------------------------------------------------------------Transaction: Component Return to subinventory Accounting Entries: dr. Subinventory Valuation Current average

cr. Work in Process InvAverage Cost Recalculated? No.--------------------------------------------------------------------------------------------Transaction: Charge Labor Resource to WIP job Accounting Entries: dr. Work in Process Inv Actual

cr. Resource AbsorptionAverage Cost Recalculated? Not applicable. standard rate = No;

charge type = Manual; actual employee rate.--------------------------------------------------------------------------------------------Transaction: Charge Non-Labor Resource to WIP job Accounting Entries: dr. Work in Process Inv User-defined

cr. Resource Absorption Average Cost Recalculated? Not applicable. Pre-defined rate or actual rate.

--------------------------------------------------------------------------------------------Transaction: Charge Overhead to WIP job Accounting Entries: dr. Work in Process Inv Calculated OH

cr. Overhead Absorption Average Cost Recalculated? Not applicable. --------------------------------------------------------------------------------------------Transaction: Charge Outside Processing to WIP job Accounting Entries: dr. Work in Process Inv PO price

cr. OSP Resource Absorption Average Cost Recalculated? Not applicable. standard rate = No.--------------------------------------------------------------------------------------------Transaction: Complete Assemblies Accounting Entries: dr. Subinventory Valuation Calc avg +MOH

cr. Work in Process Inv calc avg cr. Material OH Absorption calc’d MOH

Average Cost Recalculated? Yes, completion algorithm calculations based on job charges.

--------------------------------------------------------------------------------------------Transaction: Return Assemblies to WIP Accounting Entries: dr. Work in Process Inv Average cost of

dr. Material OH Absorption job completions cr. Subinventory Valuation

Average Cost Recalculated? Yes.--------------------------------------------------------------------------------------------Transaction: Scrap Assemblies from WIP Accounting Entries: dr. Scrap Calculated

cr. Work in Process InvAverage Cost Recalculated? Not applicable. If checkbox Require Scrap Account is checked, scrap calcs are based on job charges --------------------------------------------------------------------------------------------Transaction: Reverse Scrap Accounting Entries: dr. Work in Process Inv Average cost of job scrap

cr. ScrapAverage Cost Recalculated? No.--------------------------------------------------------------------------------------------Transaction: Close WIP Jobs Accounting Entries: dr. Variance

cr. Work in Process InvAverage Cost Recalculated? Not applicable. Entries only if job has a

residual--------------------------------------------------------------------------------------------Transaction: Average Cost Update Accounting Entries: dr/cr. Subinventory Valuation User-specified

cr/dr. Inventory AdjustmentAverage Cost Recalculated? Yes, enter % or amount of change, or new unit

cost.--------------------------------------------------------------------------------------------