What is Material Account?
Material Account refers to the setting where user can specify to which account, material transactions are effected. This setting is the link between transactions like Purchase, Sales etc from material modules to accounts module.
Why this is required?
When user makes a transaction like Purchase Bill passing and Sales invoicing, she will be referring to the materials only. Internally the system has to make necessary accounting entries in books. The items referred in the transactions are to be mapped to the respective accounts. Mapping between the Item Master and Accounting Head is required to do the account posting.
Instead of setting all the details for each of the item, a common master is made and is linked to item. Items with similar accounting needs can use the same Material Account.
Details
Material account option has the following details to be entered.
- Stock account of an item
- Consumption account of an item
- Cost-of-Goods account
- Sales
- Sales Return
- Purchase
- Purchase Return
Example
Raw Material - Indigenous
Particulars Account Name
Purchase RM Purchase A/c - Indigenous
Purchase Return RM Purchase A/c - Indigenous
Sales Sale of RM A/c
Sales Return Sales Return A/c - RM
Consumption Consumption - RM Indigenous
Stock Stock A/c - RM Indigenous
Cost-of-Goods COGS - RM
In some organizations, the accounting of material transaction may vary not (only) based on the nature of item, but also on the Tax and Duty based type of transactions. GoodBooks, provides facility to set the different Account Head for item based on the transaction.
To enable this, click on the "Transaction type Based" check box. System will list all the transactions of sales and purchase and user can enter the required account for the material account for each of the transaction.
Revision Differences
There are no differences between the November 12, 2015 @ 10:16:44 [Autosave] revision and the current revision. (Maybe only post meta information was changed.)
