Step 4 - Control Accounts - A/P Inventory Accrual
A/P Inventory Accrual is short for Accounts Payable Inventory Accrual and the account type should be typically set up as a Current Liability and usually maintains a credit balance.
It just allows Blackpurl to receive inventory into stock by a Vendor Receiving (VR) without having a corresponding invoice from the vendor (VI)
When a VR is finalised, the accounting transaction is a journal entry:
Debit - Inventory G/L
Credit - A/P Inventory Accrual
See example below of what the journal would look like in your accounting package:
Once the dealership processes the relevant Vendor Invoice (VI) then the transaction would look similar to this:
Debit - A/P Inventory Accrual
Credit - Accounts Payable under the relevant Vendor name
The end result should have the A/P Inventory Accrual clearing out:
The balance of the Dealership's A/P Inventory Accrual General Ledger should be only those Blackpurl VR that have not yet had a VI finalised
You can run a report in your Blackpurl to find these VRs - Reporting - Active Receivings
Accounting entries to this A/P Inventory General Ledger account should never be made directly from the accounting application as its balance should always match with Blackpurl Receivings which have not been reconciled with a vendor invoice.