Recording & Accounting for Stock Transactions of Goods

Recording and Accounting for Stock of Transactions of Goods

Accounting for Stock in the PGC

The System of Accounting Records and Accounts of the PGC Identification

300 -> Goes Active

600 -> Shopping

700 -> Sales

There are 2 sets of recording the goods:

1. Administrative Procedure: Only the account becomes 300.

(300) to (400) BUY

(430) to (300)

(700) SALES

2. Procedure Speculative:

(600) to (400) BUY

(430) to (700) SALES

You can do both methods but speculative is recommended. We distinguish two phases:

• During the year: The balance of the 300 reflects the opening balance.
• End of the year: An adjustment is made. There are 2 ways:
  • Balance goes to 600/700 129.
  • Inventory mirror 300. This is carried through the book store.

Create Accounts and Sub-Stock

The General Plan is flexible for businesses to create their own accounts.

300 -> Goods A

301 -> Goods B

You can use up to 309.

The Accounting Valuation of Stocks

• Initial Assessment (as baseline): We must distinguish the goods we make and the goods we bought. Goods we buy are valued at the purchase price (including all expenses that are related to the goods arriving to us). Goods that we produce are valued at production cost which includes processing costs.
• Subsequent Measurement (value adjustments): Once valued stocks are in the balance, then you have to make value adjustments. If the stock loses value, this is the value adjustment.
• Methods of Stock Value:
  • FIFO (First In First Out): It's the first to enter and first to exit.
  • Differences in Valuation: In periods of inflation, FIFO has a higher value. Inflation is when prices are climbing. When prices fall, FIFO has a lower value.

Accounting for Purchases of Goods in the PGC

The System of Accounting Records and the Identification of PGC Accounts

(600) to buy the group 30 (business, buying and selling a product without further processing).

(601) to buy the group 31 (buy something and turn it into another)

(602) to buy the group 32 (other supplies, other things like a packing box)

Creation of Accounts and Subaccounts to Record Purchases

The CDP lets companies create their accounts and subaccounts. Just 600, 601, 602 and 606. Those who go through can be invented to get around things. For example: (603) gifts, samples ...

Providers of Goods and Other Property Stocks

(400) Suppliers

(401) Bill of Exchange Suppliers

(403), (404), (405) Associated or Linked Group

(406) Packaging Suppliers

(407) Advances to Suppliers

Creating Accounts and Sub-Suppliers

(402) when there are 2 different types of providers

VAT Paid on Purchase Transactions for Goods and Other Property Stocks

(472) and its sub-accounts. Attention should be given to discounts, deductions, advances, etc.

The Accounting Valuation of the Purchases of Goods

(600) Shopping, miscellaneous expenses (freight, customs), VAT not deductible (paid), non-returnable packaging.

Registro, Monitoring and Accounting Control the Purchase of Goods and Payment Process

"Books and Records" used four books: 1) Daily Paper Mayor, 2) Book Store (inventory control), 3) Book of Invoices Received (file of all invoices received, corrective, fertilizers, returns. During the year are numbered. They meet todas), 4) Ledger to control the portfolio of payments (payments due, payment, quantity, subledger payables, control of all bills payable -> bill of exchange, promissory note)

"Documents Support Procurement Operations"

1. Vendor invoices and equivalent documents. E.g., ticket.
2. Corrected invoice.
3. Warehouse entry documents. When you enter something in the store, make a note.
4. All documents related to the payment (receipt, stub, etc.)

"Accounting Records of Purchase Transactions"

Buy

(600) to (400)

(472)

Advance Bill

(407) to (572)

(472)

(600) to (407)

(472) (572/400)

€ 5000 + VAT

5000 / 1.18 = 4247.29 proforma invoice

762.7 VAT

"The Packaging on Purchase Transactions"

Purchase of containers: profitable and unprofitable.

Packaging Cost

(600) to (400)

(602)

(472)

Unprofitable Packaging

(600) to (400)

(406)

(472)

Profitable Return

(572) to (406)

(472)

Broken Containers

(602) to (406)

"Discounts and Bonuses. Problem of Accounting for Discounts on Purchase Transactions"

"Commercial Discounts"
We do commercial department (the sales). Also when an article is promoted to the company or holding. Is accounted for by reducing the expense account.

"Discounts for Prompt Payment"

What does the finance department do and does so by paying early. Account 606.

"Purchase Volume Discounts"

For a company that buys a lot. Account 609.

"Discounts for Defective or Non-Delivery Date"

Account 608.