E9.2 Why R42800 write Inventory AAI 4240 and Revenue AAI 4230 as Credit.

[abinjohnthomas]

Hi,

Can someone please explain why R42800 write Inventory AAI 4240 and Revenue AAI 4230 as Credit.

Here is my understanding.
When a sales order is created, inventory goes out so the monetary value in that account reduces. But revenue adds monetary value to the account. Why both are in credit ?

 

[ccornagg]

Hi Thomas,

DMAAI 4230 is driving a Profit & Loss Account = Sales = Revenue (Credit = increase)
DMAAI 4240 is driving a Balance Sheet Account = Inventory = Asset (Credit = decrease)

Moreover:
DMAAI 4240 is the offset of 4220 = Cost of Goods Sold = P&L account
DMAAI 4230 is the offset of AAI RC = AR Trade Account = Balance Sheet account

Kind regards,

Carlo