on 12-28-2009 10:47 AM
Dear Xperts,
Wolud you please tell me what does it mean by offsetting entry with example. and,
What is Account modifier and what is the use of it with example??
Thank you
Hi,
while we DO GRN for a stock material for A PO,then following accounting entries will happen
Debit Stock account
credit GR/IR Account
when we do MIRO then following posting will happen
Debit GR/IR account and
credit vendor account
this is called offsetting entry
account modifier is a key comes to picture inyour automatic account determination
for three type of postings which cannot detrmine any valid value string directly
1) Price diffrence
2)consumption posting
3) consignment and pipe line material
hence account modifier are used to find the exact accounts.
Regards
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Hi,
While performing transactions which involve Accounting entries, system will post to the relevant accounts based upon the Automatic Account Determination in the system.
An offsetting entry is any entry which will be posted based upon the nature of transaction.
For example: a) If you make initial stock entry, system will debit to Stock Account (BSX) and debit to Offsetting account for Inventory posting (GBB) with account modifier as BSA
b) If you Issue goods to a cost center, system will Credit to Stock account (BSX) and debit to Offsetting account for Inventory posting (GBB) with account modifier as VBR.
In the above examples, it is quite clear that an offsetting account is an account which is used to offset the postings to various accounts.
Account modifier is a finer subdivision of the Transaction event key. They are used to differentiate the natuer of postings. For example, in the above two examples, system posted to Account Modifier BSA & VBR respectively under the same Transaction event key of GBB.
Regards,
Phani Varma
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