What is the FI effect of a goods receipt posting in the external procurement process?
A)Debit GR/IR,credit inventory
B)Debit inventory,credit COGS
C)Debit inventory,credit GR/IR
D)Debit and credit to the inventory account
E)No financial effect takes place at this step,so no FI document is created.

Question

Quizplus · Accepted Answer

In the external procurement process, when a goods receipt posting is made, the FI effect is a debit to inventory and a credit to the GR/IR (Goods Receipt/Invoice Receipt) account. This is because the goods have been received and added to inventory, but the invoice from the vendor may not have been received yet, so the invoice amount is recorded in the GR/IR account temporarily. Once the invoice is received, the amount in the GR/IR account is cleared and replaced with a credit to the vendor's account.

What Is the FI Effect of a Goods Receipt Posting