Correct Inventory Costing when Difference Due to Unit of Measure

Error:  Costed Inventory - goes over to a/p higher or lower total

Cause:  Due to a Unit of Measure Difference

Solution:

Need to add a G/L Account Code in Chart of Accounts for this variance.

Accounting>File>General Ledger>Chart of Accounts

When Costing Inventory and the amounts are different, go ahead and send to Accounts Payable, then Edit the A/P as follows

Exact value from costing process is posted to the Inventory account code (140)

Difference is posted to Short/Over account code (Newly Created from steps above)

Inventory is balanced in system.

Details:

Example: Inventory set up in system as Square Yards and vendor invoice is calculated on Square Feet.

Price quoted in square yards as $9.79 per yard and initial value $1353.27.

Vendor invoice in square feet as $1.09 per foot and total value $$1356.00.