Cost of Goods Sold in Advance

Cost of Goods Sold in Advance is used on the General Ledger side of Striven.

It is used to calculate what the Average Cost would be for items that were sold into a Negative On Hand state.

Whenever an item is sold and the On Hand is negative its adds the current value of the amount sold into the “COG Sold in Advance” field. It still posts the COGS value to the Cost of Goods Sold account in the GL, but if there is a cost difference when the receival is created, it creates a posting into the COGS account (with the Receival date) of the difference between the “COG Sold in Advance” and the Invoiced value.

When a receival is created for this product and the On Hand value goes above 0, it does the following:

puts the “COG Sold in Advance” into the General Ledger Cost of Goods sold account. As technically the Average Cost of the goods that were sold when it went into negative on hand needs to be corrected when the goods are received

Example:

1	Sample Product Cost: $10 On Hand: 0
2	POS Sell 8 Total Cost: $80.00
3	Sales Summary Cost Ex: $ 80.00
4	Journal Lines Report Cost of Sales: $80.00
5	On Hand now -8 COGS Sold In Advance: $ 80.00
6	Creditor Receival Received Qty: 10 Each Cost: $ 12.00 Total Cost: $ 120.00
7	Stock On Hand: 2 Average Cost: $ 12.00
8	COGS In Advance: $ 0.00
9	Journal Lines Report - Receival It updated the COGS: $16.00 (Which was 8 x $2.00) Which is the difference between the New Cost ($ 12.00) and Old Cost ($10.00)

There will be a difference between the Cost of Goods Sold on the Sales Reports and what is in the GL because at the time of sale the Cost was $ 80.

But the total Cost of Sales in the GL was actually $96.00 which is the value at time of sale + the differences of what was received in.