The steps below explain the effect of costing and the general ledger (G/L) account update during the production process in Dynamics 365 Business Central.

For this specific walkthrough, please find below the G/L Account that will be used:

Step 1: Inventory Posting Setup:

Step 2: After Consumption of Raw Material:

WIP Account is Debited (increase) and Inventory Account is Credited (decrease).

Step 3: After Posting Output:

• Capacity Entry: WIP account is Debited (increase) and Direct Cost Applied Account is Credited (decrease).
• Finished Goods: Interim Inventory Account is Debited (increase) and WIP account is credited (decrease).

Step 4:  After Order is Finished:

Step 5: G/L Account Updates After Reviewing the G/L Account:

• Finish Good Inventory account is Debited (increase) and Interim Inventory Account is Credited (decrease).
• At the same time, WIP account is cleared.

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