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Stock in Management Accounts, netting off against sales or purchases.

Article ID
ias-1900
Article Name
Stock in Management Accounts, netting off against sales or purchases.
Created Date
7th February 2005
Product
IRIS Accounts Production
Problem
Stock in Management Accounts, netting off against sales or purchases. Where a client nets stock in the Profit and Loss account against sales or purchases rather than showing the stock separately a different method of posting needs to be used to enter the stock in the management adjustments. This fact sheet explains how to set up the document type you will need to use and how to make the postings.
Resolution
You will only need to follow part (a) the first time you use this fact sheet. After that the new document type will be available to all clients and you can follow part (b) only. The following example assumes that the stock at the end of the period is £5,000. It is netted against the purchases in account 27 in Enhanced charts (71 in IRIS chart) in the profit and loss account and is posted to account 569 in Enhanced charts (601 in IRIS chart) in the balance sheet. First you need to set up a document type which will be used to post the stock adjustment. This only needs to be carried out once. The document type will then be available for all clients on the system if required. Select Setup | Document Types | Management Adjustments, Click New. Create a document type with the following properties: DOCUMENT TYPE: Index 19 Mnemonic MGT Description Management stock non P & L a/c Double Entry Blank Default ‘Standard’ chart account Blank Default ‘ Enhanced’ chart account Blank Properties: Automatically reverse on next opening balance (OBL) Ticked Standard journal Blank Posted amounts are usually Either This part of the routine must be carried out when posting the stock for any management client who does not use the IRIS standard profit and loss account codes. Note: the index may be different if document types have previously been added into a database. Go into the posting entry, ticking the management accounting box to indicate that management accounts were being posted, select the period for which you want to make the stock adjustment. Select the Management button to display the period, then select the relevant period to post to. Specify the entry parameters to use the new reversing document type. (You may need to select Input Control to display the Specify Entry Parameters option). Make the following posting using the newly set up document type: Purchases 27 in Enhanced chart or 71 in IRIS chart £5,000 i.e. credit the amount of the stock to the account to which stock is to be posted in the profit and loss account. Select Input control. IRIS will display a box with the relevant period balance for first side of the posting that has been made, click Yes to allow you to start the new batch. Leave the document type blank and select OK. Make the following posting: Stock 569 in Enhanced chart or 601 in IRIS chart 5000 i.e. debit the amount of the stock to the Balance Sheet Stock account. If this procedure is followed for each period the stock figure should be dealt with as you require.

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