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Module 1: Stock recording and valuation

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Perpetual stock recording

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Accounting - Perpetual stock recording

Perpetual stock recording

Stock: 1 Nov. $2000, 30 Nov. $3400

Stock bought: $6000

Stock returns: $100

Sales: $9000

Sales returns: $200

Drawings: $50

Mark up: 100%

DATE
PARTICULARS
$
DATE
PARTICULARS
$

1 Nov.
Balance
2 000
30 Nov.
Drawings
50

30
Cost of sales
100

Creditors
100

Creditors
6 000

Cost of sales
4 500

Stock loss
50

Balance
3 400

8 100

8 100

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Stock control
4 500
30 Nov.
Stock control
100

PROFIT AND LOSS A/C
4 400

4 500

4 500

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Stock control
100
30 Nov.
Stock control
6 000

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Stock control
50

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Stock control
50
30 Nov.
Profit and Loss a/c
50

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Profit and Loss a/c
9 000
30 Nov.
Debtors/Bank
9 000

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Credit/Cash sales
9 000
30 Nov.
Sales returns
200

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Debtors/Bank
200
30 Nov.
Profit and Loss a/c
200

DATE
PARTICULARS
$
DATE
PARTICULARS
$

30 Nov.
Cost of goods sold
4 400
30 Nov.
Sales
9 000

Stock loss
50

Sales returns
200

Gross profit
4 350

9 000

9 000

$
$

Sales
9 000

Less sales returns
200

Net sales

8 800

Less cost of goods sold

4 400

Gross profit

4 400

Less stock loss

50

Adjusted gross profit

4 350

Stock loss/gain is only detected when a physical count of stock occurs and
the actual amount is compared with the balance in the stock card. This
stock figure should NOT be deducted from 'Cost of goods sold' in the Profit
and Loss. The purpose of the stock figure revealed in the physical count is
to disclose stock loss/gain and to provide an amount for current assets in
the balance sheet.

The treatment of stock loss is not to be confused with stock revaluation
following the application of the 'lower of cost and net realisable value'
[1] rule. The application of this rule may require a stock write down. The
stock write down is an expense and is debited in the general journal whilst
stock control, the current asset, is credited. The stock write down should
not take place until after allowing for stock loss/gain.

Many students have difficulty adequately defining 'cost' [2]and 'net
realisable value'. [3]

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Links:
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[1] http://alison.com/#
[2] http://alison.com/#
[3] http://alison.com/#