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.
- The Actual costing process will be run at the month end to compute the product cost for all the plants.
- Accounting Entries:
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Journal Entries Created when Raw Material Procurement
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On delivering the goods to Plant:
Raw Material Inventory Valuation Account Dr
To Accrual Account Cr
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Invoicing for the goods
Accrual Account Dr
Supplier Liability Account Cr
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Payment to the supplier
Supplier Liability Account Dr
Bank Account Cr
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Issue of RM to Production floor
WIP Account Dr
Raw Material Inventory Valuation Account Cr
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Routing Step Completion
WIP Account Dr (Balancing Amount)
RCA (Resource Control Account) Account Cr (Actual Resource Count * Actual Resource Usage*Resource Cost)
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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
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FG transferred to CWH
FG Inventory Account (CWH) Dr
FG Inventory Account (FG Store) Cr
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FG transferred to Depot
FG Inventory Account (Depot) Dr
FG Inventory Account (CWH) Cr
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Sales from Depot
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On Shipment of order
COGS (Shipment Quantity * Item cost at Depot) Dr
FG Inventory ((Shipment Quantity * Item cost at Depot) Cr
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On Accounts Receivable Invoice
Accounts Receivable Dr
Discount Dr
Sales Revenue Cr
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On Receiving Customer Payment
Bank Dr
Accounts Receivable Cr
