diff --git a/accounts/report/gross_profit/gross_profit.py b/accounts/report/gross_profit/gross_profit.py
index de8651b..fa926da 100644
--- a/accounts/report/gross_profit/gross_profit.py
+++ b/accounts/report/gross_profit/gross_profit.py
@@ -1,15 +1,13 @@
 from __future__ import unicode_literals
 import webnotes
 from webnotes.utils import flt
-
-stock_ledger_entries = None
-item_sales_bom = None
+from stock.utils import get_buying_amount, get_sales_bom
 
 def execute(filters=None):
 	if not filters: filters = {}
 	
-	get_stock_ledger_entries(filters)
-	get_sales_bom()
+	stock_ledger_entries = get_stock_ledger_entries(filters)
+	item_sales_bom = get_sales_bom()
 	
 	delivery_note_items = webnotes.conn.sql("""select dn.name, dn.posting_date, dn.posting_time,
 		dn.project_name, item.item_code, item.item_name, item.description, item.warehouse,
@@ -26,7 +24,8 @@
 	data = []
 	for row in delivery_note_items:
 		selling_amount = flt(row.amount)
-		buying_amount = get_buying_amount(row)
+		buying_amount = get_buying_amount(row.item_code, row.warehouse, 
+			row.qty, row.name, row.item_row, stock_ledger_entries, item_sales_bom)
 		if selling_amount:
 			gross_profit = selling_amount - buying_amount
 			gross_profit_percent = (gross_profit / selling_amount) * 100.0
@@ -38,42 +37,8 @@
 			gross_profit, gross_profit_percent, row.project])
 			
 	return columns, data
-
-def get_buying_amount(row):
-	if item_sales_bom.get(row.item_code):
-		# sales bom item
-		buying_amount = 0.0
-		for bom_item in item_sales_bom[row.item_code]:
-			buying_amount += _get_buying_amount(row.name, "[** No Item Row **]",
-				bom_item.item_code, row.warehouse, bom_item.qty * row.qty)
-		return buying_amount
-	else:
-		# doesn't have sales bom
-		return _get_buying_amount(row.name, row.item_row, row.item_code, row.warehouse, row.qty)
-		
-def _get_buying_amount(voucher_no, item_row, item_code, warehouse, qty):
-	for i, sle in enumerate(stock_ledger_entries):
-		if sle.voucher_type == "Delivery Note" and sle.voucher_no == voucher_no:
-			if (sle.voucher_detail_no == item_row) or \
-				(sle.item_code == item_code and sle.warehouse == warehouse and \
-				abs(flt(sle.qty)) == qty):
-					buying_amount = flt(stock_ledger_entries[i+1].stock_value) - flt(sle.stock_value)
-
-					return buying_amount
-					
-	return 0.0
-
-def get_sales_bom():
-	global item_sales_bom
 	
-	item_sales_bom = {}
-	
-	for r in webnotes.conn.sql("""select parent, item_code, qty from `tabSales BOM Item`""", as_dict=1):
-		item_sales_bom.setdefault(r.parent, []).append(r)
-	
-def get_stock_ledger_entries(filters):
-	global stock_ledger_entries
-	
+def get_stock_ledger_entries(filters):	
 	query = """select item_code, voucher_type, voucher_no,
 		voucher_detail_no, posting_date, posting_time, stock_value,
 		warehouse, actual_qty as qty
@@ -84,4 +49,4 @@
 	
 	query += " order by item_code desc, warehouse desc, posting_date desc, posting_time desc, name desc"
 
-	stock_ledger_entries = webnotes.conn.sql(query, filters, as_dict=True)
+	return webnotes.conn.sql(query, filters, as_dict=True)
diff --git a/stock/doctype/delivery_note/delivery_note.py b/stock/doctype/delivery_note/delivery_note.py
index 35d008b..c0b9916 100644
--- a/stock/doctype/delivery_note/delivery_note.py
+++ b/stock/doctype/delivery_note/delivery_note.py
@@ -17,7 +17,7 @@
 from __future__ import unicode_literals
 import webnotes
 
-from webnotes.utils import cstr, flt, getdate
+from webnotes.utils import cstr, flt, getdate, cint
 from webnotes.model.bean import getlist
 from webnotes.model.code import get_obj
 from webnotes import msgprint
@@ -251,6 +251,8 @@
 		self.update_stock_ledger(update_stock = 1)
 
 		self.credit_limit()
+		
+		self.make_gl_entries()
 
 		# set DN status
 		webnotes.conn.set(self.doc, 'status', 'Submitted')
@@ -293,6 +295,8 @@
 		self.update_stock_ledger(update_stock = -1)
 		webnotes.conn.set(self.doc, 'status', 'Cancelled')
 		self.cancel_packing_slips()
+		
+		self.make_gl_entries()
 
 
 	def check_next_docstatus(self):
@@ -389,4 +393,71 @@
 		self.doclist = get_obj('Sales Common').make_packing_list(self,'delivery_note_details')
 		sl = get_obj('Stock Ledger')
 		sl.scrub_serial_nos(self)
-		sl.scrub_serial_nos(self, 'packing_details')
\ No newline at end of file
+		sl.scrub_serial_nos(self, 'packing_details')
+		
+	def make_gl_entries(self):
+		if not cint(webnotes.defaults.get_global_default("auto_inventory_accounting")):
+			return
+		
+		abbr = webnotes.conn.get_value("Company", self.doc.company, "abbr")
+		stock_delivered_account = "Stock Delivered But Not Billed - %s" % (abbr,)
+		stock_in_hand_account = self.get_stock_in_hand_account()
+		
+		total_buying_amount = self.get_total_buying_amount()
+		if total_buying_amount:
+			gl_entries = [
+				# credit stock in hand account
+				self.get_gl_dict({
+					"account": stock_in_hand_account,
+					"against": stock_delivered_account,
+					"credit": total_buying_amount,
+					"remarks": self.doc.remarks or "Accounting Entry for Stock",
+				}, self.doc.docstatus == 2),
+				
+				# debit stock received but not billed account
+				self.get_gl_dict({
+					"account": stock_delivered_account,
+					"against": stock_in_hand_account,
+					"debit": total_buying_amount,
+					"remarks": self.doc.remarks or "Accounting Entry for Stock",
+				}, self.doc.docstatus == 2),
+			]
+			from accounts.general_ledger import make_gl_entries
+			make_gl_entries(gl_entries, cancel=self.doc.docstatus == 2)
+			
+	def get_total_buying_amount(self):
+		from stock.utils import get_buying_amount, get_sales_bom
+		stock_ledger_entries = self.get_stock_ledger_entries()
+		item_sales_bom = get_sales_bom()
+		total_buying_amount = 0
+		
+		if stock_ledger_entries:
+			for item in self.doclist.get({"parentfield": "delivery_note_details"}):
+				buying_amount = get_buying_amount(item.item_code, item.warehouse, item.qty, 
+					self.doc.name, item.name, stock_ledger_entries, item_sales_bom)
+				total_buying_amount += buying_amount
+			
+		return total_buying_amount
+		
+	def get_stock_ledger_entries(self):
+		item_list, warehouse_list = self.get_distinct_item_warehouse()
+		if item_list and warehouse_list:
+			return webnotes.conn.sql("""select item_code, voucher_type, voucher_no,
+				voucher_detail_no, posting_date, posting_time, stock_value,
+				warehouse, actual_qty as qty from `tabStock Ledger Entry` 
+				where ifnull(`is_cancelled`, "No") = "No" and company = %s 
+				and item_code in (%s) and warehouse in (%s)
+				order by item_code desc, warehouse desc, posting_date desc, 
+				posting_time desc, name desc""" % 
+				('%s', ', '.join(['%s']*len(item_list)), ', '.join(['%s']*len(warehouse_list))), 
+				tuple([self.doc.company] + item_list + warehouse_list), as_dict=1)
+
+	def get_distinct_item_warehouse(self):
+		item_list = []
+		warehouse_list = []
+		for item in self.doclist.get({"parentfield": "delivery_note_details"}) \
+				+ self.doclist.get({"parentfield": "packing_details"}):
+			item_list.append(item.item_code)
+			warehouse_list.append(item.warehouse)
+			
+		return list(set(item_list)), list(set(warehouse_list))
\ No newline at end of file
diff --git a/stock/doctype/delivery_note/test_delivery_note.py b/stock/doctype/delivery_note/test_delivery_note.py
index 4666360..c2bb5d0 100644
--- a/stock/doctype/delivery_note/test_delivery_note.py
+++ b/stock/doctype/delivery_note/test_delivery_note.py
@@ -1,3 +1,89 @@
+# ERPNext - web based ERP (http://erpnext.com)
+# Copyright (C) 2012 Web Notes Technologies Pvt Ltd
+# 
+# This program is free software: you can redistribute it and/or modify
+# it under the terms of the GNU General Public License as published by
+# the Free Software Foundation, either version 3 of the License, or
+# (at your option) any later version.
+# 
+# This program is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+# GNU General Public License for more details.
+# 
+# You should have received a copy of the GNU General Public License
+# along with this program.  If not, see <http://www.gnu.org/licenses/>.
+
+
+from __future__ import unicode_literals
+import unittest
+import webnotes
+import webnotes.defaults
+from webnotes.utils import cint
+
+class TestDeliveryNote(unittest.TestCase):
+	def _insert_purchase_receipt(self):
+		from stock.doctype.purchase_receipt.test_purchase_receipt import test_records as pr_test_records
+		pr = webnotes.bean(copy=pr_test_records[0])
+		pr.run_method("calculate_taxes_and_totals")
+		pr.insert()
+		pr.submit()
+	
+	def test_delivery_note_no_gl_entry(self):
+		webnotes.conn.sql("""delete from `tabBin`""")
+		webnotes.defaults.set_global_default("auto_inventory_accounting", 0)
+		self.assertEqual(cint(webnotes.defaults.get_global_default("auto_inventory_accounting")), 0)
+		
+		self._insert_purchase_receipt()
+		
+		dn = webnotes.bean(copy=test_records[0])
+		dn.insert()
+		dn.submit()
+		
+		gl_entries = webnotes.conn.sql("""select account, debit, credit
+			from `tabGL Entry` where voucher_type='Delivery Note' and voucher_no=%s
+			order by account desc""", dn.doc.name, as_dict=1)
+			
+		self.assertTrue(not gl_entries)
+		
+	def test_delivery_note_gl_entry(self):
+		webnotes.conn.sql("""delete from `tabBin`""")
+		webnotes.defaults.set_global_default("auto_inventory_accounting", 1)
+		self.assertEqual(cint(webnotes.defaults.get_global_default("auto_inventory_accounting")), 1)
+		
+		self._insert_purchase_receipt()
+		
+		dn = webnotes.bean(copy=test_records[0])
+		stock_in_hand_account = webnotes.conn.get_value("Company", dn.doc.company, 
+			"stock_in_hand_account")
+		
+		from accounts.utils import get_balance_on
+		prev_bal = get_balance_on(stock_in_hand_account, dn.doc.posting_date)
+			
+		dn.insert()
+		dn.submit()
+		
+		gl_entries = webnotes.conn.sql("""select account, debit, credit
+			from `tabGL Entry` where voucher_type='Delivery Note' and voucher_no=%s
+			order by account asc""", dn.doc.name, as_dict=1)
+		self.assertTrue(gl_entries)
+		
+		expected_values = sorted([
+			[stock_in_hand_account, 0.0, 375.0],
+			["Stock Delivered But Not Billed - _TC", 375.0, 0.0]
+		])
+		
+		for i, gle in enumerate(gl_entries):
+			self.assertEquals(expected_values[i][0], gle.account)
+			self.assertEquals(expected_values[i][1], gle.debit)
+			self.assertEquals(expected_values[i][2], gle.credit)
+		
+		# check stock in hand balance
+		bal = get_balance_on(stock_in_hand_account, dn.doc.posting_date)
+		self.assertEquals(bal, prev_bal - 375.0)
+		
+		webnotes.defaults.set_global_default("auto_inventory_accounting", 0)
+
 test_records = [
 	[
 		{
@@ -15,18 +101,19 @@
 			"price_list_name": "_Test Price List", 
 			"status": "Draft", 
 			"territory": "_Test Territory",
+			"net_total": 500.0,
 			"grand_total": 500.0, 
 			"grand_total_export": 500.0,
 		}, 
 		{
 			"description": "CPU", 
 			"doctype": "Delivery Note Item", 
-			"item_code": "_Test Item Home Desktop 100", 
+			"item_code": "_Test Item", 
 			"item_name": "CPU", 
 			"parentfield": "delivery_note_details", 
-			"qty": 4.0, 
-			"basic_rate": 50.0,
-			"export_rate": 50.0,
+			"qty": 5.0, 
+			"basic_rate": 100.0,
+			"export_rate": 100.0,
 			"amount": 500.0,
 			"warehouse": "_Test Warehouse",
 			"stock_uom": "No."
diff --git a/stock/doctype/item/item.txt b/stock/doctype/item/item.txt
index 1a48368..036b9d5 100644
--- a/stock/doctype/item/item.txt
+++ b/stock/doctype/item/item.txt
@@ -2,7 +2,7 @@
  {
   "creation": "2013-02-21 14:54:43", 
   "docstatus": 0, 
-  "modified": "2013-02-28 10:43:02", 
+  "modified": "2013-03-06 16:02:47", 
   "modified_by": "Administrator", 
   "owner": "Administrator"
  }, 
@@ -404,18 +404,6 @@
  }, 
  {
   "depends_on": "eval:doc.is_purchase_item==\"Yes\"", 
-  "description": "Buying Cost will be updated from Purchase Orders and Purchase Receipts. <br>The buying cost will calculated by moving average method.", 
-  "doctype": "DocField", 
-  "fieldname": "buying_cost", 
-  "fieldtype": "Float", 
-  "label": "Buying Cost", 
-  "no_copy": 1, 
-  "oldfieldname": "buying_cost", 
-  "oldfieldtype": "Currency", 
-  "read_only": 1
- }, 
- {
-  "depends_on": "eval:doc.is_purchase_item==\"Yes\"", 
   "doctype": "DocField", 
   "fieldname": "last_purchase_rate", 
   "fieldtype": "Float", 
diff --git a/stock/utils.py b/stock/utils.py
index 6fac0fd..9055cee 100644
--- a/stock/utils.py
+++ b/stock/utils.py
@@ -163,4 +163,37 @@
 			elif webnotes.session.user in warehouse_users:
 				wlist.append([w])
 	return wlist
-	
\ No newline at end of file
+
+def get_buying_amount(item_code, warehouse, qty, voucher_no, voucher_detail_no, 
+		stock_ledger_entries, item_sales_bom):
+	if item_sales_bom.get(item_code):
+		# sales bom item
+		buying_amount = 0.0
+		for bom_item in item_sales_bom[item_code]:
+			buying_amount += _get_buying_amount(voucher_no, "[** No Item Row **]",
+				item_code, warehouse, bom_item.qty * qty, stock_ledger_entries)
+		return buying_amount
+	else:
+		# doesn't have sales bom
+		return _get_buying_amount(voucher_no, voucher_detail_no, item_code, warehouse, qty, 
+			stock_ledger_entries)
+		
+def _get_buying_amount(voucher_no, item_row, item_code, warehouse, qty, stock_ledger_entries):
+	for i, sle in enumerate(stock_ledger_entries):
+		if sle.voucher_type == "Delivery Note" and sle.voucher_no == voucher_no:
+			if (sle.voucher_detail_no == item_row) or \
+				(sle.item_code == item_code and sle.warehouse == warehouse and \
+				abs(flt(sle.qty)) == qty):
+					buying_amount = flt(stock_ledger_entries[i+1].stock_value) - flt(sle.stock_value)
+
+					return buying_amount
+					
+	return 0.0
+
+def get_sales_bom():
+	item_sales_bom = {}
+	for r in webnotes.conn.sql("""select parent, item_code, qty from `tabSales BOM Item`""",
+	 	as_dict=1):
+			item_sales_bom.setdefault(r.parent, []).append(r)
+			
+	return item_sales_bom
\ No newline at end of file