9 lines
1.0 KiB
Markdown
9 lines
1.0 KiB
Markdown
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# Purpose of Stock Received but not Billed
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When purchased items are received, an accounts posting is done based on the value of the purchased items in the Stock-in-hand / fixed-assets account. When you sell and deliver those items, an expense (cost-of-goods-sold) is booked, equal to the buying cost of the items.
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As stock balance increases through Purchase Receipt, Warehouse account is debited and an adjustment account called **Stock Received But Not Billed** account is credited. At the same time, the negative expense is booked in account **Expense included in Valuation** for the amount added for valuation purpose, to avoid double expense booking.
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On receiving Bill from the supplier, you will make Purchase Invoice against a Purchase Receipt. Here **Stock Received But Not Billed** account is debited, hence nullifies the balance in the Stock Received but not Billed Account.
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The balance in the Stock Received but not Billed account indicates the value of items for which Purchase Receipt has been made, but billing is pending.
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