Module 4 · Core · 9 min read
How stock ties to the general ledger
You will be able to: Name the ledger entry each stock event makes; Reconcile the Inventory account with the stock valuation; List the usual reasons the two can differ.
- Read not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
Stock has two views: quantities and values in the stock records, and a balance on the Inventory account (1300 in the standard chart) in the general ledger. Zeyto posts both from the same document in one step, so they agree. This lesson shows how each event feeds the Inventory account.
| Event | Stock | Ledger |
|---|---|---|
| Opening stock | In at cost | Debit Inventory, credit opening balance account (3900) |
| Goods receipt (GRN) | In at line Rate | Debit Inventory, credit Goods Received Not Invoiced |
| Purchase invoice with no GRN | In at line value | Debit Inventory, debit VAT Input, credit Payables |
| Sale of a stock item | Out at average cost | Debit Cost of Goods Sold, credit Inventory (plus the sales and VAT entries) |
| Purchase return | Out at stock cost | Credit Inventory, credit VAT Input, debit Payables |
| Adjustment or count | In or out at average cost | Inventory against the offset account (5100 by default) |
| Transfer between warehouses | Moves, same value | No entry |
A month in numbersOpening stock: 100 pieces at AED 10 = 1,000. Purchase: 50 pieces at 13 = 650, so 150 pieces worth 1,650 at an average of 11.00. Sales: 60 pieces, COGS 660. Adjustment: 2 damaged pieces, 2 x 11 = 22. Inventory account: 1,000 + 650 - 660 - 22 = 968. Stock records: 88 pieces x 11.00 = 968. They match.
Reconciling the two
- Open the Stock Balance and Valuation report and note the Value total.
- Open the Trial Balance or the General Ledger report for the Inventory account and note the balance at the same moment.
- If they differ, look for a cause below before suspecting a bug.
- Wrong period: Stock Balance has no date. Compare it with the Inventory balance as of today, or use Period Movement for a past date.
- Branch filters: a user limited to some branches sees only those warehouses in stock reports.
- Manual journals posted straight to the Inventory account. Stock records never see them.
- Negative stock under Warn or Ignore, with temporary or provisional costs not yet corrected. Day End lists sales waiting for a purchase.
- A document dated in a different period from the one you compared.
Goods that are received but not billed sit in Goods Received Not Invoiced (2150) as a liability, so Inventory is already right while Payables is not yet. The Goods Received Not Invoiced report lists each receipt waiting for a bill.
Watch outDo not fix a mismatch with a manual journal to Inventory. The stock records would not move and the gap would just be hidden. Find the cause: use Stock Ledger / Movement for the item and the Posting Trail for the document.
TipBefore closing the month, run Stock Status for NEGATIVE items, run the Stock report, and compare its Value total with the Inventory balance. Do a Reconciliation count and post differences before you close, so the loss sits in the right month.
Try it in the demo
- Open demo.zeyto.app/demo-app/ and sign in with the public demo user (admin, password demoAdmin123).
- Open Reports and run the Stock Balance and Valuation report; note the Value total.
- Open the Trial Balance report and find the Inventory account balance.
- Open any submitted goods receipt or purchase invoice and use the posting trail option in More.
- Open Accounting, Chart of Accounts and find the Inventory and Goods Received Not Invoiced accounts.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
Key takeaways
- Every valued stock event posts Inventory and an offsetting account.
- Transfers move stock with no ledger entry.
- The Inventory balance and Stock Balance and Valuation total should agree.
- Differences have causes: dates, branch filters, manual journals, negative stock.
Check yourself
4 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.
1. Which account holds stock value in the standard chart?
2. Opening 100 pieces at AED 10, a purchase of 50 at AED 13, a sale of 60 pieces and a write-off of 2 pieces (moving average). What is the Inventory account balance?
3. Which are plausible reasons the Stock Balance value and the Inventory ledger balance differ?
Select all that apply.