Perpetual Inventory for Non Stock Items

Question:

We have enabled Perpetual Inventory in the Company master. Still, in some Purchase Invoice, posting if done in the Expense Account.

Answer: As per the perpetual inventory, when item is a stock item, then only it's value is booked under Stock-in-hand at the time of Purchase. In this case, the posting in the GL Entry for Purchase Invoice will be as follows.

Creditors | | 100 | | Stock Received but not Billed | 90 | | | Tax | 10 | | | | | |

Perpetual Inventory doesn't apply on the non-stock item, and expense is booked for them as soon as Purchase Invoice is submitted. The posting in General Ledger for in this scenario will look like:

Creditors | | 100 | | COGS / Other Expense Account | 90 | | | Tax | 10 | | | | | |