Most of the candidates appeared before me for interview have no knowledge or lack of knowledge about journal (accounting )entries passed in ERP environment (like SAP, IFS, Oracle etc.) Hence I am trying to clarify this concept. In case of all ERP environment Flow of Transaction is same however in case of SAP environment Transaction Codes (T Code) required to book entries. If you have any query, Please feel free to write.
1.
Gate Entry (Token) –
2.
Weighment –
3.
Goods Receipt Note (GRN) –
4.
Excise Invoice –
5.
Bill Entry –
6.
Invoicing (FI Posting) –
Journal Entry
T Code
|
T Code Description
|
Entry
|
MIGO
|
Goods Receipt Note
|
Inventory A/c Dr
To, GR/IR Stores / Raw
Material A/c
|
J1iex
|
Excise Invoice (RG 23 A)
|
Basic Excise Duty A/c Dr
Education Cess A/c Dr
Higher Education Cess A/c Dr
To, Cenvat Clearing A/c
|
MIRO
|
Direct Invoice Posting
|
GR/IR Stores / Raw Material A/c
Dr
Cenvat Clearing A/c Dr
VAT Input A/c Dr
Vendor A/c
|
MIR7
|
Parking of Vendor Invoice
|
|
MIR4
|
Posting of Vendor Invoice
|
Journal
Entry For Freight Inward
|
Inventory A/c Dr
To, GR/IR Freight A/c
|
GR/IR Freight A/c Dr
Inventory A/c Dr
To, Vendor A/c
To, Service Tax Payable
A/c
|
Journal
Entry For Service Purchase
|
Expenses A/c Dr
To, GR/IR Services A/c
|
GR/IR Services A/c Dr
To, Cenvat Service
Basic Excise Duty A/c
To, Cenvat Service
Basic Education Cess A/c
To, Cenvat Service
Basic Higher Education Cess A/c
|
Flow of Sale
1.
Contract For Sale –
2.
Sales Order –
3.
Post Goods Issue (PGI) –
4.
Billing / Invoicing –
5.
Excise Invoice –
6.
Customer Payment Received –
Journal Entry
T Code
|
T Code Description
|
Entry
|
VL01N
|
Post Goods Issue
|
COGS A/c Dr
To, Finished Goods
Inventory A/c
|
VF01
|
Billing / Invoicing
|
Customer A/c Dr
Brokerage A/c Dr
To, Sales A/c
To, Excise Duty Gross up
A/c
To, GR/IR Brokerage A/c
To, VAT Payable A/c
To, CST Payable A/c
|
ZF013
|
Posting of Vendor Invoice
|
GR/IR Brokerage A/c Dr
To, Vendor A/c
|
F-28
|
Customer Payment Received
|
Bank A/c Dr
To Customer A/c
|
J1iin
|
Excise Invoice & Return
|
Excise Duty A/c Dr
To, Excise Duty Payable
A/c
|
J2iun
|
Utilisation of Excise Duty Receivable
|
Excise Duty Payable A/c Dr
To, PLA Basic Excise Duty
A/c
To, PLA Education Cess
A/c
To, PLA Higher Education
Cess A/c
To, RG23A Basic Excise
Duty A/c
To, RG23A Education Cess A/c
To, RG23A Higher
Education Cess A/c
|
F-02
|
Allocation of Excise Duty
|
PLA Basic Excise Duty A/c Dr
PLA Education Cess A/c Dr
PLA Higher Education Cess A/c Dr
To, PLA Remittance TR 6
Challan A/c
|
F-02
|
Payment of Excise Duty
|
PLA Remittance TR 6 Challan A/c Dr
To, Bank A/c
|
F-02
|
Payment of VAT Liability
|
VAT Payable A/c Dr
To, VAT Input A/c
To, Bank A/c
|
F-03
|
GL Clearing
|
Journal
Entry For Freight Outward
(GTA
= Goods Transport Agencies)
|
Freight Outward A/c Dr
GTA Service Tax A/c Dr
To, Vendor A/c
To, Service Tax Payable
A/c
|
Journal Entries
Relating to RM Consumption & FG Production
Situation
|
Entries
|
Raw Material Inward
|
Inventory Raw Material A/c Dr
To, GR/IR Raw Material A/c
|
Issue to Production Order (Internal Entry)
|
Inventory A/c Dr
To, Inventory Works A/c
|
Production Order Settlement
(Open As Expense in Trial Balance)
|
Consumption A/c Dr
To, Inventory A/c
|
Production Order Settlement
(Change in Stock – Increase / Decrease in stock of COGM)
|
Finished Goods A/c Dr
To, COGM A/c (Receipt
from Internal Order)
|
Journal Entries
Relating to Fixed Assets Acquision
Method
|
Situation
|
Entries
|
Direct : Purchase Order Item ‘A’
T Code: F-90
T Type: 100
|
Goods Receipt
|
Assets A/c Dr
To, GR/IR Assets A/c
|
Vendor Invoice Booking
|
GR/IR Assets A/c
To, Vendor A/c
|
|
Vendor Payment
|
Vendor A/c
To, Bank A/c
|
|
FA Capitalization After Stores Issue
T Code: MIGO
|
Goods Receipt
|
Inventory A/c Dr
To, GR/IR Stores A/c
|
Issue to Assets Through Mvt Type 241
|
Assets A/c Dr
To, Inventory A/c
|
|
Vendor Invoice Booking
|
GR/IR Stores A/c
To, Vendor A/c
|
|
Assets Capitalization Through Internal Order
|
Goods Receipt
|
Inventory A/c Dr
To, GR/IR Stores A/c
|
Vendor Invoice Booking
|
GR/IR Stores A/c
To, Vendor A/c
|
|
For This Purpose first create an Internal order (TCode – KO01), This
Internal Order wil seek AUC/CWIP hence
create with T Code –AS01
|
Issue to Internal Order
T Code – MIGO / F-02
Put Internal Order No in Given Space.
|
Consumption A/c Dr
To, Inventory A/c
|
Internal Order Settlement (Monthly Basis)
|
AUC A/c Dr
To, AUC Clearing A/c
|
|
Final Settlement for Assets Capitalization (on Completion of Assets)
|
Assets A/c Dr
To, AUC A/c
|
Example
Extract of Profit & Loss
|
|
Profit/(loss) before tax
|
2,030.26
|
Tax expense:
(i)
Current
tax
(ii)
Deferred
tax
|
480.00
-1268.15
|
Profit/(loss) for the period
(PAT)
|
2818.41
|
Other comprehensive income
|
|
(i) Income tax relating to items that will be reclassified to profit
and loss
|
|
- Re measurement of Defined Benefit
Plan
|
4.82
|
- Gains and losses from investments
in equity instruments designated at
fair
value through other comprehensive income;
|
11.07
|
(ii) Income tax relating to items that will not be reclassified to
profit or loss
|
-3.87
|
Other comprehensive income for
the year
|
12.02
|
Total Comprehensive Income for
the period
(Comprising Profit /(Loss) and
Other Comprehensive Income for the period)
|
2830.44
|
Extract of Schedule of Tax
Expense (in PL A/c)
|
|
i) Current tax
|
480.00
|
ii) Deferred tax
Less: Mat Credit
Total
|
-960.82
307.33
1268.15
|
Journal Entries
Relating to Current/Deferred Tax & MAT Credit Entitlement
Situation
|
Entries
|
Provision made for Income Tax Expense debited to Profit & Loss
Account for the period
|
Income Tax Expense A/c Dr
480.00
To, Provision for Tax Cr
480.00
|
Deferred Tax Income provided as Deferred Tax Liability
|
Deferred Tax Liability Dr
960.82
To, Deferred Tax Expense Cr
960.82
|
MAT Credit Entitlement Receivable
|
MAT Credit Entitlement (Assets) Dr 307.33
To, MAT Credit Entitlement (P/L) Cr
307.33
|
Extract of Inventory Schedule
Items
|
SAP Value
|
Value Computed
|
Diff
|
Raw Materials
|
2,163,712,961
|
1,192,859,141
|
-970853820.8
|
Work in progress
|
910,596,706
|
2,404,298
|
-908192407.5
|
Finished Goods
|
486,935,430
|
840,735,503
|
353800073
|
By Products
|
-87,548,104
|
73,051,604
|
160599707.6
|
Extract of Change in Inventory Schedule
Changes in inventories
|
SAP Value
|
Add: Diff. Above
|
SAP Value + Diff – Closing
Stock
|
Amount
|
Opening Stock
|
||||
Finished Goods
|
579,816,900.46
|
|||
Work-in-Progress
|
3,074,974.11
|
|||
Traded Goods
|
21,179,453.71
|
|||
By-Products
|
2,592,980.95
|
|||
Total
|
606,664,309.24
|
|||
Closing Stock
|
||||
Finished Goods
|
2,076,559,391
|
353800073
|
-1589623961
|
840,735,503
|
Work-in-Progress
|
0
|
-908192407.5
|
910596705.9
|
2,404,298
|
Traded Goods
|
0
|
0
|
0
|
0
|
By-Products
|
-828,948,476
|
160599707.6
|
741400371.5
|
73,051,604
|
Total
|
916,191,404.73
|
|||
Change In Stock
|
-309527095.5
|
|||
Opening
Stock
|
Less Above Value (A)
|
(b) = Op. Stock- (A) to be
adjusted with consumption
|
||
Raw Materials
|
-970853820.8
|
|||
Work in progress
|
3,074,974.11
|
910596705.9
|
(90,752,173)
|
|
Finished Goods
|
579,816,900.46
|
-1589623961
|
216,944,086
|
|
By Products
|
2,592,980.95
|
741400371.5
|
(73,880,739)
|
|
Traded Goods
|
21,179,453.71
|
0
|
2,117,945
|
|
Total
to be adjusted with Consumption
|
(916,424,701)
|
|||
Some Other Journal Entry generally required
in practice
2013-14
|
31.03.2014
MAT Credit Entitlement - Assets Dr 2.90
MAT Credit Entitlement - PL Cr 2.90
MAT Credit Entitlement debited as expense increases due to Prior
period restatement
MAT Credit Entitlement - PL Dr 0.35
MAT Credit Entitlement - Assets Cr 0.35
MAT Credit Entitlement credited as Contingent liability confirm as
expense and restated
|
2014-15
|
31.03.2015
MAT Credit Entitlement - PL Dr 5.44
MAT Credit Entitlement - Assets Cr 5.44
MAT Credit Set off taken for 2014-15 due to Prior period restatement
MAT Credit Entitlement - Assets Dr 0.92
MAT Credit Entitlement - PL Cr 0.92
MAT Credit Entitlement debited as contingent liability restated
|
2015-16
|
31.03.2016
MAT Credit Entitlement - Assets Dr 0.08
MAT Credit Entitlement - PL Cr 0.08
Prior period taken in 2016-17 relating to current years exp, now
restated
MAT Credit Entitlement - PL Dr 0.16
MAT Credit Entitlement - Assets Cr 0.16
MAT Credit Entitlement credited as Contingent liability confirm as
expense and restated
|
2016-17
|
31.03.2017
MAT Credit Entitlement - PL Dr 0.08
MAT Credit Entitlement - Assets Cr 0.08
Prior period restated relating to earlier years exp, now restated
MAT Credit Entitlement - Assets Dr 1.41
MAT Credit Entitlement - PL Cr 1.41
Prior period taken in 2017-18 relating to current years exp, now
restated
MAT Credit Entitlement - Assets Dr 1.74
MAT Credit Entitlement - PL Cr 1.74
MAT Credit Entitlement debited as contingent liability restated
|
2017-18
|
31.03.2018
MAT Credit Entitlement - PL Dr 1.41
MAT Credit Entitlement - Assets Cr 1.41
Prior period restated relating to earlier years exp, now restated
MAT Credit Entitlement - PL Dr 12.86
MAT Credit Entitlement - Assets Cr 12.86
Earlier year contingent liability paid in current year and restated
|
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