The most common method of valuing Stock on Hand in MDS is by average cost. Average cost provides greater procedural flexibility in a high level stock system. Micronet treats average cost as a standard cost rather than as a true average that updates and revalues each time stock is received and costed. Amounts relating to Revalue Stock Sold are generated when average cost is being used for stock valuation in Micronet. It is essentially an adjustment that occurs to correct Cost of Sales from standard to actual where items have been sold prior to receiving, thus forcing the stock levels in Micronet into negative. The goods may be physically in stock but Micronet has not been updated to include them in the stock available for sale.

As each sales invoice is entered and printed in MDS, the sales and Cost of Sales values are transferred together to the General Ledger. Where this occurs, Micronet values the goods sold at the average or standard cost defined in the system at the time of sale. Micronet transfers this cost to your Profit & Loss.

Revalue Stock Sold occurs when you eventually update your inventory files and receive the goods into MDS. If there was a variance between the average or standard and the actual cost, Micronet calculates the difference and transfers this amount to the Profit & Loss. This effectively ensures that the actual cost is now reflected in your Cost of Sales. Revalue Stock Sold is a purchase price variance.

This account posts either a debit (additional expense) or a credit (reduction to expense) to Revalue Stock Sold in the Cost of Sales section of the Profit & Loss.

It is generally recommended that individual GL accounts for purchase price variances appear separately in the GL Chart of Accounts under the Cost of Sales section of the chart rather than collected together within the one GL account. This ensures that any abnormalities in the cost prices of your products or services can be identified quickly and effectively. It also means that you can identify where, when and how problems or errors occurred during data entry in MDS.

Enter the GL account that represents the sale of non-inventory items. This GL account represents the cost of non-inventory items and the account from which the cost should be transferred. This is generally a Stock on Hand GL account. While MDS treats these items as non-inventory items, MGL still regards them as Stock on Hand for accounting purposes. Therefore accounting entries occur in the Stock on Hand GL account when a non-inventory item is received and when it is sold. When non-inventory items are sold, Micronet decreases the specified Stock GL account in the General Ledger only and transfers the cost of the items to Cost of Sales in the Profit & Loss.

The GL account entered at Non Stock SOH Sales should represent the GL account being decreased - that is, the relevant GL Stock account. This account posts a credit (reducing assets) against the Stock on Hand account in the Current Assets section of the Profit & Loss, thereby reducing the value of the stock being held.

Enter the GL account that represents the cost of non-inventory items being received into MDS. While MDS treats these items as non-inventory items, MGL still regards them as Stock on Hand for accounting purposes. This account therefore represents the GL Stock account that is used to record the value of non-inventory items received and held for sale.

This account posts a debit to the Stock on Hand account in the Current Assets section of the Balance Sheet, thereby increasing the financial value of the Stock.

Enter the main GL account for sales transactions. This account is used to record the exclusive sales value of customer invoicing and adjustment (credit) notes.

Enter the GL account that represents sales which are exclusive of GST and are transferred to the Revenue section of the Profit & Loss. This account is used to post credits (increasing income) from customer invoicing for the sales value of stock items being sold.

Enter the GL accounts that represent sales that are treated differently for GST purposes - for example, sales inclusive of WET (Wine Equalisation Tax). These accounts are used to post credits (increasing income) to the relevant sales accounts from customer invoicing for the sales value of stock items being sold. They appear in the Revenue section of the Profit & Loss.

The tax code labels displayed in these fields are user defined. For more information, refer to "Edit Company - Edit - Tax Tables".

Enter the GL accounts that represent the GST amounts appearing on customer invoices. The GL account entered in this field is for the GST Payable Account in the Current Liabilities section of the Balance Sheet. This account accumulates any GST on customer invoices, posting credits (increasing liabilities) from customer invoicing for the GST value of stock items being sold.

Enter the GL account that reflects the value of freight charged to customers for the delivery of goods sold on customer invoices. This account is used to post credits (increasing income) from customer invoicing for the freight charged and entered at the time of preparing a customer's invoice. This account appears under Freight Income in the Revenue section of the Profit & Loss.

Rounding relates more specifically to the Point of Sale ledger or Cash Sales options in MDS where rounding for cash sales occurs. This GL account should represent Sales as a debit (reduction to sales) or a credit (increase to sales) depending on the rounding that has occurred on payment of a customer invoice.

Where supplier rebates have been entered and offset against the cost of individual items within MDS, an adjustment needs to be made to the Cost of Sales accounts in MGL. As the value of the Stock on Hand has been reduced, Micronet needs to transfer this cost to the Profit & Loss. This in turn reduces the amount transferred at sale for Cost of Sales. These amounts are eventually offset by the receipt of the actual rebate income received and banked.

MDS posts a credit (reducing assets) to the Stock on Hand account in the Current Assets section of the Balance Sheet, and posts a debit (increasing expense) in the Cost of Sales section of the Profit & Loss. This reduces the value of the stock by the rebate, revaluing the cost on each item correctly and transferring the adjustment amount to a Cost of Sales Adjustment Account in the Profit & Loss.

For example:

• Item 1 costs $5.00 each, rebate received per item was $1.00.
• Item 1 is revalued at a cost of $4.00 per item. Micronet reduces the value of Stock on Hand by $1.00 for each item, writing these amounts off to Supplier COS Adjustments in the Cost of Sales section of the Profit & Loss.
• When Item 1 is sold, the $4.00 cost that remains in stock is transferred to Cost of Sales in the Profit & Loss. Therefore, the correct cost of $5.00 has been expensed at different intervals to the Profit & Loss.

The reason for staggered transfer to the Profit & Loss is mainly for reporting purposes in MDS. Gross margins on individual products can be reported taking into account the rebates received from suppliers, thus reflecting a true margin on a product-by-product basis.

When the actual rebate is banked and recorded in MGL as income, the value of the Cost of Sales matches the value recorded in MDS. Both ledgers reflect the effect that rebates received from suppliers have on your products and financial records.

Enter the GL account that represents Loyalties Accrued. This GL account accumulates the value of debtor rebates pending in MDS.  When rebate payment types are selected, this reduces the Loyalties Accrued GL account.  These transactions will therefore not update to the bank.

This has been changed to Loyalties Redeemed in 2.8.