Materials Ledger Card--Perpetual Inventory:
As purchased materials go through the
systematic verification of quantities, prices, physical condition, and other
checks, the crux of the accounting procedure is to establish a
perpetual
inventory - maintaining for each type of material a record showing quantities
and prices of materials received, issued, and on hand.
Materials ledger
cards or stock ledger sheets constitutes a subsidiary materials ledger
controlled by the materials are inventory accounts in the general ledger or
in the factory ledger.
Materials ledger cards commonly show the
account number, description or type of material, location, unit measurement,
and maximum and minimum quantities to carry. These cards are the materials
ledger with new cards prepared and old ones discarded as changes occur in
the types of materials carried in stock. The ledger card arrangement is
basically the familiar debit, credit, and balance columns under the
description of received, issued, and balance. Following is an example of
material ledger card:
Example | Sample of materials ledger card:
Piece
or Part No.____________________
Reorder Point___________________
Description________________________
Reorder Quantity_________________
Maximum Quantity__________________
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Received |
Issue |
Balance |
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Date |
Res.
No |
Qty |
Amount |
Date |
Res.
No |
Qty |
Amount |
Qty |
Unit
cost |
Amount |
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The approved invoice with supporting
documents, such as the purchase order and receiving report, goes to the
materials ledger clerk. These documents enable the clerk to make the
necessary entries in the received section of the materials ledger card. Each
receipt increase the balance on hand and the new balance is extended upon
entry of the receipt.
Unsatisfactory goods or defective units
should be detected by the inspection department before being stored or even
paid for. The receiving report should show materials actually accepted, and
the ledger entries are made after all adjustment. However, goods accepted in
the storeroom may be found unsatisfactory after part of a shipment has been
used in the factory, and the balance may then be returned to the vendor.
Since these units were entered in the received and balance section of the
materials ledger card when they were placed in the storeroom, an adjustment
must be made. The recommended procedure is to enter the quantity and the
value of the returned shipment in red in the received section and to reduce
the balance accordingly.
When the storekeeper issues materials, a copy
of the requisition is sent to the materials ledger clerk, who then makes an
entry in the issued section of the materials ledger card showing the date,
requesting number, job, lot, or department number, quantity, and cost of the
issued materials. The new balance is computed and entered in the balance
column. As already explained, these manual operations can be performed in an
electronic data process (EDP) system based on the computer program designed for the materials
transactions.
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