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Something Funny With GR/IR Clearing?

Former Member
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Hi,

I wonder why do we need an adjustment account to configure the automatic GR/IR clearing because all we want to do is transfer the balance from GR/IR account to the target account, to achieve this, can't we just credit the GR/IR and debit the target account or debit the GR/IR and credit the target account?

Why do we need the adjustment account then?

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Former Member
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Hi,

Target account :

Goods received invoice not received: Liability account

Invoice received but goods not received: Asset account

Adjustment account : Replica of main GR/IR account

Please assign point as way of thanks

Thanks & Regards

D.K.Lakshmi Narayana

Former Member
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one last question, wht account is GR/IR, liability or asset? i think its liability right?

Former Member
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Hi Raj

GR/IR is liability.

When the Good is received the journal will be:

debit to inventory xxx

credit to GR/IR xxx

Logicly, when you received this goods, you haven't paid yet. So in nature the GR/IR represents the account payable estimation until the invoice received.

regards,