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Re: Thoughts on Voiding Invoices
- Subject: Re: Thoughts on Voiding Invoices
- From: Alejandro Imass <..hidden..>
- Date: Fri, 22 Sep 2006 08:35:34 -0400
On Thu, 2006-09-21 at 12:50 -0700, Chris Travers wrote:
> for some things. In fact, I think we can break this down into two
> sets of different problemsÑ
> 1) Voiding invoices
> 2) Product returns
> Part 1: Voiding Invoices
> When an invoice is voided, it seems straightforward enough to suggest
> that the accounting transactions are simply reversed. However, with
> volitile prices on some goods, this poses some problems. Exactly what
> is supposed to be the value of the inventory? What sort of
> adjustments are needed? When is the adjustment posted? etc. It
> seems to me that with FIFO, the value of the inventory ought to be the
> same as if the *latest* items sold were never sold. This means that
> an adjustment may need to be posted to the COGS and inventory accounts
> to update the amount. This is the step that SQL-Ledger kindly omits
> for you :-)
IMHO, it should be reversed to the actual COGS of that particular
invoice. In other words, a real and exact reverse of the cost at the
moment of the Invoice. The idea of voiding the invoice is because you
made a mistake and should not affect anything else.
Futhermore we should also think in practical terms. You are not going to
void an invoice that already hit the street.
> However, the valid question is raised-- if an invoice is voided in a
> different accounting period (say issued on Dec 30th and voided on Jan.
> 1st after other invoices were sent out which substnatially change the
> COGS per unit), when exactly does the adjustment get posted?
Is this an actual business need? I will talk to my wife who is a Public
Accountant _and_ an Economist to get her opinion. She has been an SL
user for about 4 years now and has a rather large wish list!
> Part 2: Product Returns
> I think we can all agree that product returns ought to be treated
> similar to a repurchase at the last cost of goods sold value. We can
> iterate back if the price changes :-) I think we can also agree that
> this doesn't pose any serious accounting dilemmas...
> Best Wishes,
> Chris Travers
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