Stock and Stores

ledger, accounts, materials and system

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In many businesses this is the only practicable method of ascertaining the stock on hand for the purpose of monthly returns, and although the system leaves much to be desired from the theoretical standpoint, yet it serves a purpose that could not otherwise be accomplished.

Stores.—It has already been explained that the term "stores" includes all raw material or partly manufactured goods to be used in the process of mann facture.

In large works there always exist so great a risk of materials being used on a job and not charged, or of being improperly taken away, that some system of stores accounts is absolutely essential if loss is to be avoided.

Materials may be divided into three classes :— (a) Goods and materials purchased direct for a job.

(b) Goods and materials for stock.

(c) General stores, such as nuts, bolts, &c.

If a proper system of cost accounts is in operation, the stores purchased direct for a particular order can be debited direct to such account in the cost ledger, and need not be entered in the stores ledger at all.

If, however, the goods purchased are for stock, the amount of each invoice should be charged direct from that source to an account in the stores ledger, which is ruled as follows :— The stores purchased will be debited to various accounts in the nominal ledger in the ordinary way, the debits in the scores ledger usually being made direct from the invoices.

Usually stores accounts record quantities only, although in some cases it is possible to add money columns as in the example given.

When stores are required for a job the storekeeper, before issuing the same, receives a requisition note signed by the foreman, giving a full de scription of the stores to be issued and the number of the job.

Generally the workmen fetch the material and sign the requisition notes themselves, the foreman examining the same each day, and initialling them if correct.

Thus each account in the stores ledger not only records what quantity has been issued, but also the jobs for which the material was required.

It is not usually practicable to keep any accurate record of small stores such as nuts, bolts, screws, &c., but requisition notes should be made out for these in the same way as for other stores, and then it is possible to roughly ascertain the stock on hand.

No efficient system of costs can be properly carried out unless stock accounts are kept, and, as explained in the article on COST ACCOUNTS, the record in the cost ledger of materials used is obtained from the requisi tion note, which also serves as the posting medium to the stores ledger; thus the extra work entailed is but slight.

Apart, however, from the statistical records obtainable, each manu facturer ought, as a preventative against waste and fraud, to institute some system of checking the stores bought and used.

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