Ch-6 Inventory ledger.ppt

Ch-6 Inventory ledger.ppt

• 1.
  …CONTINUED – MAINTAINING INVENTORY LEDGER MAINTAINING INVENTORYLEDGER
• 2.
  2 Overview – InventoryLedger  Inventory ledger is maintained to keep track of details of each inventory type.  Inventory accounts maintained in a subsidiary ledger should be interlinked with a given ‘inventory’ controlling account in the general ledger.
• 3.
  3 Inventory records helpto determine:  Automatic inventory balances after each transaction;  To determine cost of sales of each sales transaction;  To determine gross profit of each transaction, etc.
• 4.
  4 …continued Inventory account maybe affected in connection with the following cases:  When inventory items are acquired;  When inventory items are sold;  When inventories acquired are returned;
• 5.
  5 Maintaining Inventory Ledger Similar to other subsidiary ledger cases, inventory ledger can be maintained by selecting ‘inventory items’ from the ‘maintain’ menu:
• 6.
  6 …continued Major information tobe filled while maintaining an inventory item includes:  Inventory ID and description;  General ledger ‘sales’ account to be affected with the specific inventory item (compulsory);  General ledger ‘inventory’ account to be affected (compulsory);  General ledger ‘cost of sales’ account to be affected (compulsory);
• 7.
  7 …continued - Cost flowmethod adopted (FIFO, LIFO, or weighted average); - Item class; - Location; - Minimum stock;