Homework Help: Questions and Answers: What happens in SAP MM when booking a valued goods receipt for an order item with material master and account assignment K (cost center)?
Answer:
In SAP Materials Management (SAP MM), when you book a valued goods receipt (GR) for an order item with material master and account assignment K (cost center), it follows a series of steps. Here’s a step-by-step explanation of what happens:
Purchase Order Creation:
- A purchase order (PO) is created with account assignment category K (cost center).
- In the PO, a material master is used, but instead of valuating the material in inventory, the costs are directly assigned to a cost center (because of the K account assignment).
- Account assignment K indicates that the goods are not meant to go into stock but are consumed directly by a cost center.
- A General Ledger (G/L) account will be automatically determined based on the valuation class of the material and the account assignment.
Goods Receipt (GR) Posting:
- When the goods are received, a Goods Receipt is posted for the PO in SAP MM.
- Since the material has account assignment K (cost center), the goods receipt will not result in stock update in inventory. Instead, it is considered a direct consumption against a cost center.
Material Document Creation:
- A material document is created to document the physical receipt of goods. This confirms that the quantity of the material has been received.
Accounting Document Creation:
- Along with the material document, an accounting document is also generated. This document records the financial impact of the goods receipt.
The accounting entry for this transaction would look like:
- Debit: The cost center (or the associated G/L account for the cost center).
- Credit: The GR/IR clearing account (Goods Receipt/Invoice Receipt clearing account), which acts as a placeholder until the vendor invoice is received and posted.
Cost Center Update:
- The cost center specified in the purchase order is updated with the value of the goods received. This represents the consumption of the material.
GR/IR Account Handling:
- The GR/IR clearing account is used to balance the financial entry because the invoice has not yet been posted. This ensures that the financial documents are correct before the vendor invoice is posted.
- When the vendor invoice is posted later, the GR/IR account is cleared.
Conclusion:
- The material is not updated in stock; it’s directly consumed.
- The cost center absorbs the cost of the goods, which are recorded in the accounting document.
- The GR/IR account is used to balance the accounting entries for the goods receipt until the invoice is received.
This process allows SAP to track both the material flow (through material documents) and the financial implications (through accounting documents).
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