Stock entry difference account. Which to choose?


I manufacture something based on a BOM for which raw materials cost 3€ and operations cost 2€.
When I “update finished goods”… I get a stock entry with two lines:

  1. raw materials: 3€
  2. finished product: 5€

and in additional costs it has one line:

  1. Operating costs as per production order/BOM: 2€

And it asks me for a Difference account.
What should I put here?
What happens if I leave it blank?
What is it used for?


Refer Following link,i think it will be helpful.


Hello @shraddha, thank you for the link. Although it does talk about the difference account, the context is stock reconciliation, and I can’t seem to understand how that explanation will apply to my scenario…