Explain the sub-contracting process with movement types and transaction event keys.

35.Question: Explain the sub-contracting process with movement types and transaction event keys.

Answer: there are many scenarios in sub-contracting in which we will send the child materials to vendor and vendor makes furnishing and make it ready as a finished goods and for service charge, we will pay to the vendor.

Sometimes we will collect even waste while manufacturing, so this is another scenario.

Movement types: -scrap scenario

541- goods transfer to vendor.

101-Goods received to plant

543- Consumption takes place by vendor

542- to receive the by-product from vendor

545-vendor delivers the by-product

Cancellation of every movement type mentioned above is +1

Transaction event keys:

BSX- Parent material credit

WRX- GR/IR clearing

BSV- Consumption of Material by vendor

FRL- Service charge from vendor

BSX- Child material credit

GBB(VBO)- Debit

Accounting entries examples:

C- 10, C2- 15 SC- 5

101- BSX + = 30

          WRX- = 5

SC – BSV – 30

         FRL + 5

543- BSX - = 15

          GBB+(VBO) = 15

543- BSX- = 20

        GBB+(VBO) = 20