Explain the Accounting Side of GR?

When you post a GR with reference to a purchase order:

􀂃 GR before Invoice Receipt:

o A posting will be made to the stock account (stock value increases)

o An offsetting entry is made to the GR/IR clearing account

􀁸 Once the invoice is received, the GR/IR clearing account is cleared

􀁸 A posting is made to the A/P account for the vendor (payables increase)

􀂃 Invoice Receipt (IR) before the GR

o A posting is made to the A/P account for the vendor (payables increase)

o A posting is made to the GR/IR clearing account

􀁸 Once the goods are received, the GR/IR clearing account is cleared

􀁸 A posting will be made to the stock account (stock value increases)

When the GR is for a consumable material, the initial posting will go to the consumption account (expense account) instead of a stock account. However, the offsetting entry will still go to the GR/IR clearing account. The value of the posting to the stock account will depend on which type of price control is being used.