GL Impact of Drop Shipped Items

Scenario

This article shows the GL Impact of Drop Ship Items on Transactions

Solution

1. On Cash Sale/Invoice:

Debit: Cash or Accounts Receivable
Credit: Sales

2. On Vendor Bill:

Debit: Cost of Goods Sold
Credit: Accounts Payable

Note: There is no effect on Inventory Asset Account. Furthermore, Item Receipt/Fulfillment has no GL impact for drop ship transactions.