Question

What should you check if the balance of the GR/IR account is not zero at the purchase order item level on the balance sheet key date?

There are 2 correct answers to this question.

1) Check to see if the goods were invoiced by the key date, but have not yet been delivered.
2) Check to see if the goods were ordered by the key date, but have not been received.
3) Check to see if the goods were delivered by the key date, but have not yet been invoiced.
4) Check to see if the goods were produced by the key date, but have not been invoiced.

Answer 1

If the balance of the GR/IR account is not zero at the purchase order item level on the balance sheet key date, you should check if the goods were delivered but not invoiced, or if the goods were ordered but not received.

Step-by-step explanation:

When the balance of the Goods Receipt/Invoice Receipt (GR/IR) account is not zero at the purchase order item level on the balance sheet key date, there are two possible checks to perform:

1. Check to see if the goods were delivered by the key date, but have not yet been invoiced: This could result in an outstanding balance in the GR/IR account. The goods have been received, but the invoice has not been generated or processed.
2. Check to see if the goods were ordered by the key date, but have not been received: This could also result in an outstanding balance in the GR/IR account. The purchase order has been created, but the goods have not yet been delivered.