What is price difference account in SAP CO - Controlling?

SAP Term: price difference account

• Component: CO

• Component Name: Controlling

• Description: An account that records price differences for materials managed under standard prices, or differences between purchase order and billing prices.

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• Key Concepts: 
  A price difference account is a type of account used in SAP Controlling (CO) to record the difference between the price of an item when it was purchased and the price of the same item when it was sold. This account is used to track the cost of goods sold and to ensure that the company is not overpaying for items. 
  
  How to use it: 
  The price difference account is used to record the difference between the purchase and sale prices of an item. When an item is purchased, the purchase price is recorded in the price difference account. When the same item is sold, the sale price is recorded in the same account. The difference between these two prices is then calculated and recorded in the account. 
  
  Tips & Tricks: 
  It is important to ensure that all transactions are accurately recorded in the price difference account. This will help to ensure that the company does not overpay for items and that all costs associated with goods sold are accurately tracked. 
  
  Related Information: 
  The price difference account can be used in conjunction with other accounts, such as inventory accounts, to track costs associated with goods sold. Additionally, this account can be used to track changes in prices over time and to identify any discrepancies between purchase and sale prices.