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Chapter 8 ■ Defining Adjustment Accounts for GR/IR Clearing
Figure 8-1 illustrates how GR/IR clearing accounts are posted in the system using a double entry
procedure. For example, goods worth $1500 were delivered to you, but you got an invoice for $1000.
Figure 8-1. Accounting transaction showing differences between goods delivered and the invoice receipt
The $1500 of goods is posted as a debit item in the Inventory Account (B) and the corresponding
credit posting of $1500 is carried out by the system to the GR/IR Clearing Account (A). The balance of
$500 (the $1500 goods delivered less the partial delivery invoice of $500) is posted to the credit side of the
Vendor Account (C). A corresponding debit balance of $500 is posted to the GR/IR Clearing Account (A).
The system will then post the $500 and difference between goods delivered and invoice receipt to the
GR/IR Adjustment Account (D), and post an offsetting entry to the Received but not Invoiced Account (E).
Upon the creation of financial statements, the and postings are reversed at a balance sheet date.
■■Note
Before you proceed with the settings in this activity, go to “Appendix A, Chapter 8, GR/IR Clearing” to
create the GL accounts for your configuration.
The next section looks at the steps involved in customizing the GR/IR clearing accounts when an
invoice is received but goods have not yet been delivered.
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