Contents Of Account Sets

When you add an account set, you enter a unique code of up to six characters for the set, and a description (for example, Assembled Items). Account set codes can contain upper-case letters and numbers.

For each account set, you specify a costing method, and you enter account numbers for the following general ledger accounts:

• Inventory Control. An asset account containing the total value of the inventory on hand. The account increases when you receive goods, and decreases when you ship goods.

The word "control" in the account name means that the account contains only totals, whereas the information stored by Inventory Control contains details on an item-by-item basis.

When you process all accounting entries correctly, the total value of the inventory in the Inventory Control system equals the totals in the Inventory Control accounts in the general ledger.

• Payables Clearing. A suspense account to which Inventory Control posts the "other side" of the accounting entries for inventory you receive (and for previous receipts you return to suppliers).

Inventory Control normally generates credit entries to this account for inventory you receive; therefore, the account can be thought of as the accrued amount payable for goods received into inventory. Inventory Control debits this account when you enter receipt returns.

In Sage ERP Accpac Accounts Payable. As you post the related vendor invoices in Accounts Payable, offsetting journal entries (debits) related to the inventory purchased are generated against the Payables Clearing account to clear the balance that is left in this account from posting the inventory receipt.

• Adjustment Write-Off. The account to which you post inventory adjustments and write-offs. Entries to this account are normally expenses (debits); therefore, the account number you specify should be in the expenses or cost of goods sold section of your general ledger.

• Assembly Cost Credit. The account to which you post the variable and fixed costs of assembling items. The program credits this account with the variable and fixed cost of assembly. You may want to create manual entries in the general ledger to redistribute the assembly cost credit to accounts such as labor costs.

• Non-stock Clearing. The account which you credit when you ship non-stock items, and debit when you enter shipment returns for non-stock items.

Using non-stock items. You can use non-stock items to handle specially ordered items which you do not stock in your inventory, and to handle service charges that appear on invoices.

• Transfer Clearing. The Transfer Clearing account is used to hold the additional cost incurred during a stock transfer. For example, if you transfer 10 items from location 1 to location 2, where the original cost of the items is 50.00, and the additional cost to do the transfer 6.00.

• Shipment Clearing. Debited instead of Cost of Goods sold when shipping goods from Order Entry.

The Shipment Clearing account is required because the shipment and invoicing functions in Order Entry are separated. The COGS account is debited when you invoice the shipment.

• Disassembly Expense. Used if you specify an expense amount when you disassemble items that were previously assembled in Inventory Control.

• Physical Inventory Adjustment. The expense account that balances the change in inventory value when you adjust inventory quantities after making a physical inventory count.

• Credit/Debit Note Clearing. An account that is debited instead of the I/C Control account or the Damaged Goods account when Order Entry sends returns to Accounts Receivable. The G/L transaction credits the clearing account instead of COGS and A/R Control.

The Credit/Debit Note Clearing account is required because the inventory return and credit note functions in Order Entry are separated, with one side of the transaction going through the Accounts Receivable program.