If you use Material Ledger’s Actual Costing, then you would know that the Post Closing Step creates accounting documents depending on how the variances for the Material have been distributed. For example, a material with a price (or exchange rate) difference of $100 could be sold, scrapped, used in a production order that is complete, used in a production order that is not complete, transferred to another plant, or left in inventory. And this only refers to the differences that are created on the material itself (single-level), and not the differences that are transferred from other materials (multilevel) which have their own slew of Material Ledger postings.
Because of this, it is easy to be overwhelmed by the volume of postings that are created by the Material Ledger’s closing entry and what they mean. Some companies choose to label the General ledger accounts appropriately to indicate what the posting is for, but if you do not understand the posting, it is easy to incorrectly label the General Ledger account. Also, you may not need a separate general ledger account for each scenario as that may lead to more General Ledger accounts than you need, and may create even more confusion.