The current GL postings for RMA Scrap do not make sense. In the Product Line Maintenance you must setup the Scrap account as your Inventory Asset account. If you do not then the postings do not work correctly. This is very confusing and not intuitive.
GL Posting that occur when item action = scrap on an RMA:
1. SO Credit Memo:
Debits: Scrap account Credits: COGS
2. Inventory adj or physical count to take the item out of Inventory:
Debits: Inv Adjustment Credits: Inventory
*Inventory Adjustment removes from "Inventory account" even though you received the item into a "Scrap account". Therefore you must make the scrap account = Inventory account.
by: Karen H. | over a year ago | Sales & Distribution
Comments
I agree - I reconciled the RMA Scrap GL compared to the Sales Returns GL for Jan. - Jun. 2018 and I found that because the RMA Scrap GL was set to a COGS GL (they SHOULD be expensed as they can no longer be sold) there were no stocked ItemCodes that impacted the RMA Scrap GL in Product Line Maintenance. However, any Miscellanous Items posted the RMA Scrap GL. We should be able to write off to gross margin, or any expense GL, Item Activity that has been identified as Scrap to the Scrap warehouse.
Agreed. You should have option to actually scrap it. Expense it & dont return it to inventory since that is what 99% of actual businesses do. They dont return it to a scrap warehouse to review it & then do another entry to write it off.