How Sales and Purchases a/c's hit P&L a/c in SAP ERP ? (10th Response)...

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How Sales and Purchases a/c's hit P&L a/c in SAP ERP ?
Reply from Vidhya Dhar | posted Nov 20, 2011 | Replies (13)

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Related to accounting entries in sap purchase ac ...:
Purchase account and purchase offsetting account Purchase account and purchase offsetting account

Hi Rahul There is no question which can be silly in this world. In fact, all questions are sensible and all of them become silly once you have found out the answer. Therefore , do not regret. As I told you before, you segregate all general ledger master records as Balance sheet / profit and loss statement related even while creating the master record. With regard to P & L related master records, you also assign the retained earnings account to which any profit / loss has to be transferred. Then you create a suitable financial statement version to assign all general ledger accounts suitably to create the balance sheet and profit and loss statement. All balance sheet related accounts have their closing balances transferred as opening balances ( you run a closing program ). All P & L related accounts form a single entity ( viz. profit / loss ) the profit / loss gets transferred to the retained earnings account. Please refer to my earlier post to see how *stock* after sales moves from the balance sheet to the profit and loss account as cost of sales. The cost of sales and related sale knock each other to derive profit which is transferred again to the balance sheet as retained earnings. Regards VidhyaDhar

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Best Answer
Hi Rahul

by Vidhya Dhar

Nov 20, 2011

Your accounting entries are picture-perfect. However, please excuse me for my saying as follows: It would be of much help to you to do a quick revision of an accounting primer book since you need to be absolutely have a good grasp of accounting concepts. The question you have asked has something to do partly with SAP ERP and also partly with regard to basic accounting. You need to understand that that there are two methods of accounting a. period accounting and b. cost of sales accounting. SAP uses cost of sales accounting method wherein purchases account never features. Instead, it is accounted as Material account ( as correctly mentioned in your entry ) which features as an asset in the balance sheet. When yousell this material to a customer, the material account is reversed and cost of sales account ( mastered as a profit and loss related general ledger master record ) gets debited. The entries would happen as: 1. Customer Debit Sales Credit ( Sales is mastered as a profit and loss account ) when the sales invoice is accounted and 2. Cost of Sales Debit ( P & L related ) Debit Material Credit when there is outflow of the sold material
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3/21/2012 11:04 AM

How Sales and Purchases a/c's hit P&L a/c in SAP ERP ? (10th Response)...

http://sap.ittoolbox.com/groups/technical-functional/sap-acct/how-sales-a...

In SAP, while creating any General Ledger master record, you have to define it either as balance sheet related or as profit and loss account related ( please look for the related radio buttons in the first screen when you create a general ledger master record next time ). You create financial statements via creation of a financial statement version where you use separate nodes for balance sheet accounts and profit and loss accounts and assign the general ledger master records created by you. This is how creation of profit and loss account and balance sheet happens wherein based on how you have assigned material account features as a current asset in the balance sheet and the cost of sold material appears in the profit and loss account as cost of sales. Regards VidhyaDhar

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Hi Friends, as per my knowledge the entry for purchases...

Asked by Rahul Narayanan | Nov 20, 2011

Hi, purchase,purchase return,sales etc all come in trading...

Reply from suvo cal | Nov 20, 2011

Hi Rahul. We have to map manually P&L statement and...

Reply from Narasimha Bandaru | Nov 20, 2011

member vote

p2p - RFQ -> PR-> P.O->Approval(option)->GRN(MIGO)...

Reply from jhansi priya | Nov 20, 2011

Hi Rahul Your accounting entries are picture-perfect...

Reply from Vidhya Dhar | Nov 20, 2011

Best Answer

Vidhya Sir, super fantastic explanation! best regds Suvo

Reply from suvo cal | Nov 20, 2011

Thanks everybody .... Vidhya Dhar Sir you are really awesome...
Reply from Rahul Narayanan | Nov 20, 2011

Rahul. Please continue with the accounting entry for...

Reply from Sridhar Shrinivasan | Nov 20, 2011

member vote

Good Day, Sales and purchases are the main source of...
Reply from Abdul Razak | Nov 20, 2011

Hi everybody, I am really sorry to ask such a question...

Reply from Rahul Narayanan | Nov 20, 2011

Hi Rahul There is no question which... -- current message

Reply from Vidhya Dhar | Nov 20, 2011

member votes

Hi Sridhar Thanks for your compliment. I agree with...

Reply from Vidhya Dhar | Nov 20, 2011

member votes

Hi Rahul, Please check this link: http://www.sapscene...

Reply from Georgebc007 | Nov 21, 2011

member votes

Dear rahul, In sap you are recording purchase and the...

Reply from Raghavendra badkilaya | Nov 21, 2011

member vote

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