Expected Cost is used, the sample entries as below:
Sample entries for expected cost as below:
| Transaction | Dr. | Cr. | |
|---|---|---|---|
| Receipt | Entry 1 | Inventory (Interim) | Inventory Accrual (Interim) |
| Purchase Invoice | Entry 1 | Inventory Accrual (Interim) | Inventory (Interim) |
| Entry 2 | Inventory | Direct Cost Applied | |
| Entry 3 | Purchase | Account Payable | |
| Shipment | Entry 1 | COGS (Interim) | Inventory (Interim) |
| Sales Invoice | Entry 1 | Inventory (Interim) | COGS (Interim) |
| Entry 2 | COGS | Inventory | |
| Entry 3 | Sales | Account Receivable |