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Product output and valuation account are same error

odimegwu david
on 7/22/13, 2:11 PM 8,423 views

can anyone help me? I got this message when I wanted to Receive a product whose Purchase Order was already confirmed: Error: Cannot create Journal Entry, Output Account of this product and Valuation account on category of this product are same. I do not know how to resolve it. Beats me! TIA

Additional details. Just found this out: Stock Input Account, Stock output Account and Stock Valuation Account have the same values: 1107 Stock Account. i wonder why input account and valuation account should not be the same. Can anyone explain why they should be different? My accounting says I am correct, unless I am missing out on something. tia

odimegwu david
on 7/22/13, 2:19 PM
On 7/23/13, 12:20 AM

Dear David, To correct your error follow below steps. Please note its just an example, you have to name your accounts according to your chart of accounts 1) create an Account called "Purchase Account" (Internal Type=Regular, Account Type=Expense). Then make this the Stock Input Account. 2) Then create an Account called "Purchased Stock" (Internal Type=Regular, Account Type=Asset) and make this as the Stock Valuation Account 3) Create an Account called "Cost of Goods Sold" (Internal Type=Regular, Account Type=Expense) and make this as the Stock Output Account 4) Make sure your "Expense" account and "Stock Input" account in the product/product category are the same.

The above scenario will give you a perfect stock valuation and accounting. Please note it's just an example of setting this. You can do it in your own way

Thanks Farouk. I have already done so after reading a blog entry. I followed the stock inventory model : beginning inventory + purchases = available for sale. Av. for sale = cost of goods sold + end inventory. I want to ask one question though: Why is the Purchase Account with Account type=Expense in your prescription, because I think it should be of type=Asset, just as Purchased Account is type=Asset. Your response would be helpful.

odimegwu david
on 7/23/13, 7:36 AM

Hi David, in my Chart of Accounts, "Purchase Account" represents the money I spent for buying the products, so it's an expense account. The "Purchased Stock" represents the stock bought by the company, so that's the Asset account you are referring to in my case. So when I create a Purchase Invoice, my "Purchase Account" will get debited and "Supplier Account" will get credited. Then when I create an Incoming Shipment document for receiving those purchased product, "Purchase Account" will get credited and "Purchased Stock" account will get debited.

on 7/23/13, 5:18 PM

Now when you sell this product, this is the way accounting entries gets created. 1) When Sales Invoice is created, "Sales Account" gets credited with sales price and "Customer Account" gets debited with sales price 2) When you create a Delivery Order for the same product and deliver it from the warehouse, "Purchased Stock" Account gets credited with the cost price and "Sales Account" gets debited with the Cost Price.

on 7/23/13, 5:18 PM

Chart of accounts comment: I follow your logic, Farook, but the money spent for buying the product is reflected in either Accounts Payable for the customer (if on credit) or cash account (if on cash basis). You should rename Purchase Account, Stock Purchases Account. I am a student of accounting. On buying goods, you debit the Stock Purchases Account and credit the cash or Accounts Payable account. Eventually, when you are to deliver the goods, or when it is doing inventory management, the system does a reconciliation between Stock Purchases Account and Purchased Account (to be continued)

odimegwu david
on 7/24/13, 6:40 AM

in reconciliation, it then credits Stock Purchases Account and debits Stock Purchased Account. so check account reconciliation for all your stock accounts. I uncheck for all accounts by default. So, you see, both are stock accounts and asset accounts, only that openerp wants a seamless inventory management system so it doesn't confuse purchases with stock available for sale which is that base for valuation. thanks. also, it was programmed that beginning and ending stock are virtual containers which are reflected in Stock Purchased Account.

odimegwu david
on 7/24/13, 6:44 AM

BTW, when you deliver goods, Stock Purchased account gets credited while cost of goods sold is debited. Cost of goods sold is an expense account.

odimegwu david
on 7/24/13, 6:55 AM

@Farook can you please tell me that what is internal type and Account Type for Price Difference Account ?(I installed account_anglo_saxon module)

on 8/22/13, 10:28 AM

Ray Carnes

--Ray Carnes--
| 9 7 9
Keyport, United States
--Ray Carnes--

Senior ERP Analyst

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Ray Carnes
On 7/22/13, 6:50 PM

The valuation account holds stock accounting moves (debits and credits) that correspond to the movement of the stock, and the overall value at any given time.

Stock moves either into or out of the stock location.

The stock input account holds the corresponding credits for the value of stock moved into the stock location.

The stock output account holds the corresponding debits for the value of stock moved out of the stock location.

It may be easier to watch the demo and/or review the slides that show how to set this up. http://www.ursainfosystems.com/webinar

Hi, Ray. Your link is now dead. Do you have an updated link? I am running through this issue right now and can't figure out why this error says my accounts are the same when clearly they are different. There isn't a single same entry on any line. Your video might be of help. Thanks.

Elephante, Sean Samborski
on 7/29/14, 2:46 AM

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Asked: 7/22/13, 2:11 PM
Seen: 8423 times
Last updated: 3/16/15, 8:10 AM