Goods Received Not Invoiced

It is often the case that a business might receive goods purchased from a supplier before they receive an invoice for those goods.

Since the goods have been received, under the perpetual inventory system, they need to be entered into inventory. As the invoice has not been received from the supplier, the liability to pay for the goods cannot be recorded as an accounts payable, and an alternative account needs to be established.

Typically, the account is named the ‘Goods received not invoiced’ account and is shown as a current liability account in the balance sheet.

Goods Received Not Invoiced Example

Suppose a business has purchased goods from a supplier to the value of 800, and the goods are received before an invoice has been received.

The business operates a perpetual inventory system, and the first journal needed is to record the receipt of the inventory.

Goods received not invoiced journal entry
Account Debit Credit
Inventory 800
Goods received not invoiced 800
Total 800 800

Since the invoice has not been received, the liability to pay for the goods cannot be posted to accounts payable, and is temporarily posted to the goods received not invoiced account.

When the invoice is received from the supplier, the liability can be transferred from the goods invoiced not received account to the accounts payable account of the supplier using a second journal entry.

Invoiced received journal entry
Account Debit Credit
Goods received not invoiced 800
Accounts payable 800
Total 800 800

The balance on the goods received not invoiced (GRNI) account is now zero, and the net effect of both postings is to record the receipt of the goods into inventory and the liability to pay the supplier in the accounts payable account.

Note: The posting of the goods received into inventory only applies to a business operating a perpetual inventory system. If the business operates a periodic inventory system, goods are not entered when received but are counted at the end of the accounting period, and the first posting relating to the purchase will occur when the invoice is received from the supplier.

Goods Received Not Invoiced October 24th, 2017Team

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