Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chap 8 - Accounting for Stock (FIFO (Assumption - stock purchased first…
Chap 8 - Accounting for Stock
Stock
Good purchased by a firm for resale
Stock Cards
Subsidiary record
All transactions relating to individual line
Stock Control Account
Summarises all movements of stock
General ledger of a firm
FIFO
Assumption - stock purchased first sold first
even though business has no way of knowing
Without marking stock, no way of knowing cost price
Hence acceptable and necessary assumption
Not possible for some items to be labelled individuallyto get cost price
Possible for some, but not practical
Even if possible to practical, not worth time, effort or cost to mark indiviually
Stocktake
Physical count of number on units of each line of stock on hand
Stock Loss
Expense(stock outflow)
Reasons: theft, damages, undersupply from supplier, oversupply to customer
Stock Gain
Revenue(stock inflow)
Reasons: Undersupply to customer, oversupply from supplier
COGS
Expenses incurred in getting stock into a location and condition ready for sale
Includes:
Customs/Import Duties
Freight in/delivery from supplier
Modifications
Packaging
Buying expenses
Gross Profit
assess adequacy of firm's markup
relationship between selling prices and cost prices
Adjusted Gross Profit
isolate stock loss or stock gain
bring to attention of owner so strategies developed to any problems