Use Item Cost as Transfer Cost > Item Fulfillment from a transfer order shows a Debit to the Gain/Loss Account and not the Asset Account

Setup > Accounting > Accounting Preferences> Order Management tab>Transfer Order Preferences> Use Item Cost as Transfer Cost = Yes > Item Fulfillment from a transfer order showsan Income Account and not the Asset Account

 

 

Solution:

 

One ofthe possible reasons is because the preference Use Item Cost as TransferCost is set to No at the time the Transfer Order was created. Takenote that the preference to be applied in the item fulfillment is thepreference at the time of the transfer order entry.

In such case, when transfer price is zero, there will be a debit to IncomeAccount and credit to Inventory Asset Account for the source location. On theother hand, when the transfer price is higher than the cost of the asset, therewill be a debit to the Inventory In Transit Account for the transfer price,credit to Inventory Asset Account for the cost of the item and credit to IncomeAccount for the difference between the transfer price and cost.