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Accounting entries for return to supplier from expense

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edited May 23, 2023 1:35PM in Costing 3 comments

Summary:

The accounting entries for a return to supplier for an expense destination receipt seem to be missing the PO encumberance reversal. Is this normal and how to fix it.

Content (required):

When doing a return to supplier from inventory, the accounting entries generated are:

Account dt ct

Receiving Inspection (dt)

Inventory Valuation (ct)


Purchase order (dt)

Reserve for encumberance (ct)


Accrual (dt)

Receiving Inspection (ct)


However, when doing a return to supplier from expense, the accounting entries generated are:

Account dt ct

Receiving Inspection (dt)

Expense (ct)


Expense Accrual (dt)

Receiving Inspection (ct)


Isn't it missing the purchase order encumberance reversal like for return to supplier for an inventory destination? What am I missing here?

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