The Inventory And Cost System

The Inventory and Cost System

Introduction

It allows to know the value of its inventories and the cost of those sales. It can be reflected in its special cards for each of its items, manual or computer registration depending on business management, to find this cost, the different annotations such as: class, date, number of units, whether bought, sold, consumed, consumed and those existent. 

Developing

Every time a marketing is done, it will be updated immediately. These have become common use, large companies or warehouses use it so that it allows them to update these data through a cash register. The records of permanent inventory, we can also know it as continuous or perpetual, these can be carried out in accounting in terms of amounts and costs or in unit quantities.

The fact of using it does not exempt the company with a physical inventory at least once in 12 months, in order to confirm those inventories detailing them in the cards and prepare the adjustments when those differences have to be presented, equalizing them with the physical counting result. It is widely used in large commercial companies and does not require physical inventories for their accounting operation. 

This method implies the use of kárdex that allow assessing the goods that are sold as those that remain in existence. The value of inventories must include all direct and indirect expenditures and charges necessary to put them into conditions of use or for sale.

To determine the value one of the following methods should be used: PEPS (first to enter, first to leave). UEPS (last to enter, first to leave).

Weighted average. Among the main characteristics of this system are: it has movement every time there are entries or exits of goods, the purchase account is not used in this system, the physical inventory is only carried out as a control measure and to comply with the legal norms that They force even to make an inventory every year. The cost of merchandise sold is dynamic throughout the period, allowing the system to know at all times its value. 

For each sales operation it is necessary to carry out two seats; Cost and sale. The inventory card is applied for each type or reference. Who use it? Large companies use for the information that reflects and is of the utmost importance to make business decisions and for whom it is in charge of this function. One of its notorious characteristics is for its cost as machinery and vehicles, it is often controlled and managed by several departments.

It is because they have separate wineries, a task is designated to each of the members. These are the types of seats that are used to register those purchases and sales under the perpetual system: merchandise inventory: it is the available merchandise, that is, that the cellar has to later be marketed. Merchandise sales, correspond to the income that the company receives.

When the consumer acquires a product; which will be carried out under the rules of said company, the corresponding collection, such as support of the invoices according to the amount to which it was sold or agreed, may or may not contain discounts. In cash, double information is required: sale price and sale cost, which is why two seats are recorded.

The inventory account and their card supply important information: sales managers use the highest inventories to see which of all their products are sold quickly and which do not. Sales personnel use the highest assistant to determine the amount available. The employees responsible for ordering the merchandise resort to the highest inventories to determine when a specific product must be requested again.

conclusion

The amounts to be ordered and the names of the largest suppliers, example: the “Second Level B Commercial Company” begins its purchase sales activities on January 1 with the following operations: January 7. Purchase of merchandise of 152 units at $ 200.00 50% is canceled in cash and the bill of exchange. January 20th. Sale of merchandise from 90 units at $ 180.00 and its cost of sale is (13207.14). February 7. From the purchase made 60 units are returned per fault merchandise at $ 200.00.