How to understand the debit outstanding in receiving account after return to vendor?
SummaryHow to understand the debit outstanding in receiving account after return to vendor?
After performing return to vendor, receiving cost distributions and journal entries are generated at current average cost of the item, but the second leg of RTV is recorded at PO price. I can understand the second leg of transaction being accounted at PO price because return to vendor, we create a credit memo at PO price to the vendor. But what this does is create an outstanding debit balance in receiving account as landed costs consumed as part inventory receipts are not passed onto vendor. Is clearing receiving account manually the only way or please help us understand how this