gr/ir clearing account?
when i do good receipt against purchase order gr/ir clearing account is credited and inventory account is debited.please explain me in detail about gr/ir clearing account.if there will be no gr/ir clearing account what will happen.
Mohammed Qasim Malik replied
in the finance terms there will be always credit against debit to make the balance so when you do GR stock account is debit and GR/IR account is credit. when you do invoice verification GR/IR account is debit and vendor account is credit, so in this way GR/IR account is zero, in the same way when we pay to vendor there will entry of debit and an bank account will be credit. these are standard business practice.