Core Financial Modules

[gettingitdone]

This is an amateur question. But here goes

Vendor gives credit for incorrect price on  line item on a previous po that has been invoice and recieved in.  Should I put the credit against cost of goods or inventory.  We recieved a qty of 500 and have only sold 200.  So do I decrease cost of goods or inventory?

Thanks so much for any help.

[BadgerJerry]

I wouldn't post the credit to either Inventory or COGS.  Instead I would post it to the PO Variance Adjustment account you have identified in Product Line Maintenance for this item.  An alternative would be the Inventory Adjustment account.

[TomTarget]

Jerry's suggestion works OK as long as the amount is not material or all the inventory clears out by the end of your reporting period.   Whether it goes to variance or cogs just depends on how you want to track it.  All comes out on the bottom line.

If the $ amount is material at the end of your reporting period,  in addition you may want to correct the valuation of the inventory,  by using transaction entry (adjustment) to pull the incorrect valued inventory out and put it back in at the correct price.   Hit the account you decided to use in the first step when you do the adjustment.