if a purchase order is placed onto a system(ACCESS/DIMENSIONS if anyone knows of that particular system) but nothing happens with that purchase order, it doesnt get invoiced by the vendor and goods are not delivered, would this order just be carried over to next period without any accounting entries.
If the goods are delivered but not invoiced by the vendor and the company hasnt raised a sales invoice, what would be the accounting entry. Would the stock be part of the closing stock for Dec? and no other entries?
Re the first paragraph, the order would simply get carried forward. There would be no accounting entries; the goods haven't been delivered, so stock cannot increase and the supplier cannot chase payment.
If the goods are delivered and still in stock, but not invoiced by the supplier, a provision needs to be made:
Dr stock Cr creditor/accrual
The stock figure has to increase as the company has physically taken title to the goods, and the corresponding liability has to be reflected.
When an invoice turns up, the provision should be cancelled and the invoice processed as normal. Effectively, this will simply move the liability from 'creditors' to the purchase ledger.
