Inventory adjustment creates two journal entries - why?

[Bud]

I was tracking the results of an inventory adjustment transaction when I
discovered the system broke the resulting entry to the G/L into two, separate
journal entries.

The adjustment transaction (# 0000000009826) contained 123 lines; two
journal entries were output by GP.

The first entry had the following reference information:

Journal Entry #: 499514
Source Document: IVADJ
Audit Trail Code: GLTRX00021619
Reference: Transaction Entry
Orig Audit Trail Code: IVADJ00001482

The second journal entry had the following information:

Journal Entry #: 499515
Source Document: GJ
Audit Trail Code: GLTRX00021620
Reference: SALES0000000009826
Orig Audit Trail Code: GLTRX021618

The sum of the two entries equals the adjustment transaction. The first JE
is comprised of the first 25 lines of the adjustment, while the second JE
contains the remainder.

Does anyone know why this would happen?

--
Bud Cool
Microsoft Certified Business Management Solutions Specialist, GP 9.0
Financials
Currently supporting: GP 9.0, SP2

[Jason Dorell]

Hi Bud

The following applies for Inventory items with a valuation method of Average
Perpetual, LIFO Perpetual, or FIFO Perpetual items using Microsoft Dynamics
GP 9.0:

1. Dynamics GP 9.0 will automatically generate general ledger adjustments
for situations where an item was sold or consumed from Inventory, but its
cost was later changed.

In earlier versions, the system generated a report telling you to manually
enter the adjustments to Inventory and COGS to correct the accounts used by
the transactions that sold or consumed the items. As of Dynamics GP 9.0,
those adjustments will now be automatically generated.

a. Dynamics GP 9.0 saves additional Quantity Sold transaction detail in the
IV10201 table. This additional data allows the system to generate the
adjusting transactions.

b. The system will generate the General Posting Journal report for the
adjusting transactions for those “quantity sold” transactions that posted
after upgrading to Dynamics GP 9.0. The cost variance journal will still
display the message suggesting a cost adjustment for transactions for items
that posted prior to upgrading because there won’t be Quantity Sold details
for those transactions.

2. Actions that can cause the system to generate general ledger adjusting
transactions for Average Perpetual, LIFO Perpetual, or FIFO Perpetual items
(the adjustment amount will be for the difference between what the cost the
transaction originally posted at and the newly determined cost):

a. Use the Adjust Cost Utility to change a purchase receipt’s Unit Cost. The
system will calculate the cost difference to determine the amount by which to
adjust a transaction.

b. The user selects to revalue inventory when posting a purchasing invoice
where the invoice cost differs from the shipment cost.

c. A PO line item is changed to a status of Closed when its Quantity Shipped
is greater than the Quantity Invoiced, when Quantity Invoiced is not zero.

d. Post a Purchase Order Return.

The following report changes will be applied for the automatically generated
transactions:

a. The system will generate the General Posting Journal report to show
details about the adjusting transactions that were generated based on the
Quantity Sold detail transactions.

b. When you change a purchase receipt’s cost using the Inventory Adjust
Costs utility, the system will generate the General Posting Journal report
for the resulting cost adjustments after the Cost Adjustment Audit Report has
been generated.

b1. The Cost Adjustment Audit Report changed to only display suggested
adjustment records (account number, description, type, debit, credit
information) for purchase receipts that were posted prior to the
implementation of the new functionality.

b2. When the system generates cost adjustment transactions, the Cost
Adjustment Audit Report will display the journal entry for receipts for which
a cost adjustment transaction was generated

c. When the system generates cost adjustment transactions, an additional
Purchase Receipts Update Detail report will be appended to the cost variance
report.

If revalue inventory for cost variances is unchecked the inventory purchase
receipt is not revalued and the General Ledger is expensed to a Cost Variance
account. This is seen in the two GL cost adjustment reports you attached.

Regards,
Jason

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