Generate Purchase and Variance Transactions for Warehouse Transfers Option

This option is important when processing inventory transfers from one warehouse to another. Go to Inventory > Options > Warehouses tab to view or change this option as shown below:

• A pair of Cost of Sales transactions is created each time inventory is purchased using an expense invoice. Review the Inventory Variance section for details on the Cost of Sales transactions.

• The Create purchase and variance entries when transferring items option should be turned ON only if the general ledger accounts and departments for each warehouse are not the same and the purchase values are desired for each warehouse. These transactions are not necessary to create accurate cost-of-sales totals for each warehouse or division.

If this option is turned OFF:

Only Inventory General Ledger asset transactions are created to identify the transfer within the inventory item's history. No Cost of Sales transactions are created. Review the Transferring Inventory Between Warehouses section for more details on the standard transactions.

If this option is turned ON:

The purchase values will be debited to the Purchase General Ledger account for the To Warehouse and credited to the G/L account for the From Warehouse. The offsetting inventory variance transactions will be created for each warehouse as well. Inventory General Ledger asset transactions are created no matter how this option is set. Review the Inventory Variance section for more details on the Variance G/L transactions.