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Here's what happens in Finance during Goods are Received. PURCHASE ACCOUNT LINKING MANUAL
- Inventory: Items that are classified as inventory are normally items that are kept in stock and will directly upon receiving be charged to the P&L. At goods received it will debit the balance inventory account as linked and credit the invoice to receive. At goods distribution, it will credit the balance account and debit the cost account of the department that raised the SR.
- Asset: Items that are classified as Assets are items that have a life cycle of more than one year also called Capex or Capital Expenditure and can be automatically depreciated. At Goods received it will debit the balance account and credit the invoice to receive. At goods distribution, it will remain in the balance account until you disposed it and it will transfer to your cost account.
- P&L: Items that are classified as P&L are normally basically perishable items or items not worth keeping the value in the stock. At goods received it will debit the cost account of the department that raised the SR and credit the invoice to receive. At Goods received it will debit the cost account and credit the invoice to receive. At goods distribution, it will credit the cost account and debit the cost account of the department that raised the SR.
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