Stock-Taking

STOCK-TAKING. To prepare a balance sheet (q.v.) it is necessary for a trader to arrive at a valuation of his stock-in trade; this process is called stock-taking or, in America, inven tory-taking. When proper stock records are available, they are of course an invaluable check upon the accuracy of the stock taking; but in their absence it is essential that the process of stock-taking should be performed with the utmost care. If a wrong value be placed upon stock, the accounts embodying that valuation will to a corresponding extent misstate the profits of the undertaking and its current financial position, and to a corre sponding extent the accounts of the ensuing period will be affected in the opposite direction. The lower the rate of turnover the more serious will be any error in the periodical stock-taking. In many cases, the only independent check that the trader has upon the accuracy of his stock-taking is the inherent probability of the percentage of profit shown by the trading account.

The generally accepted basis for the correct valuation of stock in-trade, assuming the goods to be in a readily saleable condition, is either the price they actually cost or the price at which they could then be bought in the open market, whichever of the two be the lower.

But although it is unsound to take into account any rise that there may have been in market values since the goods were bought, it would be equally unwise for a trader to dispose of his stock upon a rising market at normal prices, when he can only replace the goods sold at a greatly enhanced figure. Usually, therefore, although rising market prices are ignored for stock taking purposes, selling prices are advanced as buying prices in crease; and this is equalized by the fact that as buying prices fall, it commonly becomes necessary for the trader to reduce his selling prices, though he still has stock purchased at the higher rate.

Responsibility.

In most businesses it is usual to make the general manager responsible for the general accuracy of the stock taking. The managers of departments are responsible to him, and the actual work is split up among the various employees, each of whom is held responsible for his section of the work. Those employed in counting, measuring or weighing goods are usually those familiar with the handling of these goods, and thus able to identify them as being correctly described. The cost prices are then entered on the list by clerks from actual invoices. The managers decide what (if any) percentage is to be deducted from goods that are old-fashioned, or otherwise out of condition, and the remaining calculations are then completed in the office, after which the summary is certified by the general manager.

The actual process of taking stock is often rendered more diffi cult and uncertain because it has to go on while trading operations are in full swing, and goods are accordingly constantly coining in and going out. It is very necessary to take precautions to ensure that no errors arise from this cause. For this reason some business houses prefer to close their premises during stock taking, even although it means a corresponding loss of trade. Further, it is important to see that the invoices relating to all goods which have in fact been included in stock are also included in the books as purchases, even although (as is sometimes the case) the actual invoices do not come to hand until later; con versely, invoices already to hand relating to goods in transit may, of course, be excluded from purchases.

When the trade is a seasonal one, it is usual to fix a date for stock-taking that comes between the two seasons, as it is naturally more convenient to take stock when the stock is at its lowest. In such cases it sometimes happens that deliveries of new season's goods have already been accepted, the invoices for which are "dated forward," i.e., into the new accounting period. In such cases it seems admissible to exclude the value of these goods both from the purchases of the past period and also from the stock-taking. (L. R. D.) STOCKTON, FRANCIS RICHARD ( g _34-1902 ) , Amer ican writer, was born in Philadelphia (Pa.), April 5, 1834. On the completion of his high-school course Stockton studied wood en graving, but his tastes were so definitely literary that he soon turned to journalism. He contributed to various magazines and was on the editorial staff of Hearth and Home, the Century Magazine and St. Nicholas, of which he became assistant editor in 1873. About 1880 he gave up editorial work for independ ent authorship. He died in Washington (D.C.), April 20, 1902.

Stockton's first published books were fanciful stories for children Ting-a-Ling-Stories (187o), Roundabout Rambles in Lands of Fact and Fancy (1872), etc. In 1879 his reputation with older readers was established by his amusing and original Rudder Grange (1879), his best long work, although a series of sketches rather than a novel. His peculiar talent was for the short story ; some of the best examples are the title-stories of the volumes The Lady or the Tiger? (1884), The Christmas Wreck (1886) and The Bee Man of Orn (1887). Effective also are the novelettes The Casting Away of Mrs. Lecks and Mrs. Aleshine (1886), and its sequel, The Dusantes (1888).