Perpetual Inventory for Non-stock Item

Perpetual Inventory for Non-stock Item

Question: We've enabled Permanent Inventory in the Company master. Nonetheless, some Purchase Invoices are posted to the Expense Account.

Answer: According to the perpetual inventory, only the item's value is recorded under Stock-on-hand at the time of purchase when the item is a stock item. In this instance, the GL Entry for Purchase Invoice will be recorded as follows.

Non-stock items are not subject to Perpetual Inventory, and an expense is recorded as soon as the Purchase Invoice is submitted. In this scenario, the General Ledger entry will look like this: