Allocating Salary and Rent

[Former Member]

Hello All ,

Our process , We manufacture , stock it and sell it

During this process we incur cost like

Rent  , Uitlitlies (Electricity bills etc ) for which we will book accouting entry and make the payments

1) Utilities cost will be distributed to the products through allocation and distribution cycle and I belive Rent as well 
----> please correct me if my understanding is wrong here

2) Now in the income statement , we will always be showing the actual expenses incurred right like Rent , utilities etc ? 
it has nothing to do with the cost that was distributed in the above step right ?

3) Also Do we ever reclass the COGS  ?

Thanks

Aryan

[ajaycwa1981]

That's a nice Question

1. Yes. You are right

2. Yes. That's correct

3. Usually No. But accounting is full of Ifs and BUTs. May be some scenario may entail. But usually not

Ajay M

[Former Member]

Thanks for the reply Ajay , your reply grows my confidence ...

1) My user keeps telling  expenses has to be allocated and thus reduce the expense from the actual GL thus reducing the cost. --> What do I say to the client ?

2) I think when we run the assessment distribution rule , it goes to the product and generates a

copa document right ? there is no accouting document at all .

please give me a breif simple explanation of assessment and distribution cycle

3) As you know since I had that issue of not able to execute CON2 based on our last thread, I had asked them to confirm the Utility and Overheads , since both are create as spearate activity type .

They did that and the process order now has planned utitily and actuals .

I see the accouitng entry as FICO assesment account or Expense account Dr and the smae account Cr , is it right ?

Thanks

Aryan