Cost Accounting Journal Entries in Oracle ERP EBS

Recording accounting events may vary from entity to entity. However, the Cost Accounting Journal Entries which are created in Pharmaceutical  Manufacturing Industry in Oracle ERP Systems are presented for your  understanding with some other facts and decisions.

1. The Actual costing process will be run at the month end to compute the product cost for all the plants.

2. Accounting Entries:

1. Journal Entries Created when Raw Material Procurement

• On delivering the goods to Plant:

Raw Material Inventory Valuation Account  Dr

To Accrual Account  Cr

• Invoicing for the goods

Accrual Account  Dr

Supplier Liability Account  Cr

• Payment to the supplier

Supplier Liability Account  Dr

Bank Account  Cr

2. Issue of RM to Production floor

   WIP Account  Dr

Raw Material Inventory Valuation Account  Cr

3. Routing Step Completion

WIP Account  Dr (Balancing Amount)

RCA (Resource Control Account) Account  Cr (Actual Resource Count * Actual Resource Usage*Resource Cost)

 

4. Production Batch Completion

FG Inventory Account  (Actual Product Output Qty*Org Total Item Cost) Dr

WIP Account  [Actual Product Output Qty*(Org Item Material Cost + Organization item Resource Cost)] Cr

 

5. FG transferred to CWH

FG Inventory Account  (CWH) Dr

FG Inventory Account  (FG Store) Cr

 

6. FG transferred to Depot

FG Inventory Account  (Depot) Dr

FG Inventory Account  (CWH) Cr

 

7. Sales from Depot

• On Shipment of order

COGS (Shipment Quantity * Item cost at Depot) Dr

FG Inventory ((Shipment Quantity * Item cost at Depot) Cr

 

• On Accounts Receivable Invoice

Accounts Receivable Dr

Discount Dr

Sales Revenue Cr

 

• On Receiving Customer Payment

Bank Dr

Accounts Receivable Cr