Account type of 'Purchase Balance Account'

[former_member1329470]

Hi,

I'm a SAP Business One user.

Due to to the company detail setting:

• the continuous stock; and
• 'Use Purchase Accounts Posting System',

I need to set up 'Purchase Balance Account' to create a credit memo for inventory purchased.

Having understood that

'Purchase Balance' account is credited or debited to reflect any variance between the purchase account and the cost-of-goods-purchased account,

I wonder if I need to set up the account under

• Current Asset;
• Cost of Goods Sold; or
• Something else.

If I'm in a situation where applying a full credit to an invoice for goods purchased, the purchase quantity will be fully reversed (no inventory) so I assume the purchase balance should be recorded as an positive or negative expense.

If anyone is familiar with the account setting, please give me an advice.

Thank you

[Former Member]

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