What happens to the GR/IR account when a supplier invoice is posted?

When a supplier invoice is posted, the Goods Receipt/Invoice Receipt (GR/IR) account is cleared to reflect the completion of the purchasing process. The GR/IR account serves as a temporary holding account that captures the value of goods received but not yet invoiced, as well as the value of invoices received that have not yet been matched to a goods receipt.

Posting a supplier invoice typically involves matching the invoice to the appropriate goods receipt, which ultimately clears the entries in the GR/IR account. This clearing action ensures that the financial records accurately reflect the transaction, moving the expense from the GR/IR account to the appropriate expense account and clearing any outstanding amounts associated with the goods receipt. This mechanism helps maintain the integrity of the financial reporting and ensures that the company’s liabilities are accurately represented.

While other options may describe actions that could happen in the context of accounting, they do not accurately reflect the specific process that occurs with the GR/IR account at the time of posting a supplier invoice.