Accounting for unbilled supplies and inventory in transit in accounting -- method A
How to account for unbilled supplies and stock in transit to the year end (Method A)
At the year end most accountants encounter situations when one has to account for unbilled supplies. These accounting transactions are accounted for once a year and it is practical to have them prepared in a short review.
The following accounting operations should ensure the smooth handling of these year-end accounting transactions.
| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 17.12. | Invoice for goods: - value of the goods - VAT |
Invoice | 20 000 4 000 |
131 343 |
321 321 |
| 20.12. | Receipt of goods into the warehouse invoiced on 17.12. | receipt of stock | 20 000 | 132 | 131 |
| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 15.12. | Receipt of material into the warehouse valued according to the delivery note | delivery note and receipt of stock | 14 000 | 112 | 111 |
| 19.12. | Invoice for material on 15.12.: - value of the material - difference in valuation - VAT |
Invoice a internal note | 15 000 1 000 3 000 |
111 112 343 |
321 111 321 |
| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 29.12. | Receipt of material into the warehouse according to the delivery note | delivery note and receipt of stock | 5000 | 112 | 111 |
| 31.12. | Reserve for the unbilled supply of material physically received on 29.12. - the price in the delivery note is inaccurate | Internal note | 5000 | 111 | 323 |
| 7.1. | Invoice for material* received on 29.12.: - liability - difference in valuation |
Invoice Internal note |
5000 1000 |
323 112 |
321 323 |
|
*The supplier is not a VAT taxpayer and the invoice was issued in January. For the supplier that is also a VAT taxpayer, the tax obligation is created on the day of the delivery, and for the buyer of goods that is a VAT taxpayer, the right to deduct the VAT is created on the day, when the goods became chargeable. In such cases we do not account for unbilled supplies of goods. |
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| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 21.12. | Invoice for material: - value of the material - VAT |
Invoice | 10 000 2 000 |
111 343 |
321 321 |
| 31.12. | Material in transit invoiced on 21.12. | Internal note | 10 000 | 119 | 111 |
| 5.1. | Physical receipt of material invoiced on 21.12. | Receipt of stock | 10 000 | 119 | 111 |
| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 28.12. | Receipt of goods into the warehouse according to the delivery note | delivery note and receipt of stock | 5 000 | 132 | 131 |
| 31.12. | Unbilled supply of goods received on 28.12. - the price is known based on the contract |
Internal note | 5 000 | 131 | 326 |
| 6.1. | Invoice for the goods* received on 28.12. | Invoice | 5 000 | 326 | 321 |
| Date | Accounting Transaction | Document | Amount in EUR | Debit | Credit |
| 18.12. | Invoice for goods: - value of the goods - VAT |
Invoice | 20 000 2 000 |
131 343 |
321 321 |
| 31.12. | Goods in transit invoiced on 18.12. |
Internal note | 20 000 | 139 | 131 |
| 4.1. | Physical receipt of the goods on 18.12. | Receipt of stock | 20 000 | 131 | 139 |
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