The stock taking may either be done annually or continuously. In the later method, the stock taking continues throughout the year. A schedule is prepared for stock taking of various bins (store rooms). One bin is selected at random and the goods are checked as per shown in the bin card. Then some other bin is selected at random and so on. The personnel associated with storekeeping are not told of stock taking programme because store rooms are chosen at random. The Institute of Cost and Management Accountants, London defines perpetual inventory system as "a system of records maintained by the controlling department, which reflects the physical movements of stocks and their current balance." The stores ledger and bin cards are helpful in this system because these records help in knowing the movement of stores. This facilitates regular checking of stores without closing down the plant.
Procedure of Perpetual Inventory System
The following procedure is followed for perpetual inventory system:
1 The up to date position in stores ledger and bin cards should be made to know the current balance of stores.
2 The stores are selected in rotation for checking the items physically. Some items are taken up every day for verification. The program is planned in such a way that in a year every item is checked 3-4 times.
3 The stores which have not been inspected as yet should not be mixed with other stores because no entries are made for such items.
4 There is a surprise checking every time. The store-keepers are informed of stock taking only one the day of checking. This promotes store-keepers to keep their records up to date.
5 The physical stock available in the store after counting, weighing etc. is recorded on sheets provided for this purpose.
Contact any of the accountant firm for your audit and accounting needs call us at 31 (0) 35-8200999 or you can visit here at - http://www.whitfieldd.com
Procedure of Perpetual Inventory System
The following procedure is followed for perpetual inventory system:
1 The up to date position in stores ledger and bin cards should be made to know the current balance of stores.
2 The stores are selected in rotation for checking the items physically. Some items are taken up every day for verification. The program is planned in such a way that in a year every item is checked 3-4 times.
3 The stores which have not been inspected as yet should not be mixed with other stores because no entries are made for such items.
4 There is a surprise checking every time. The store-keepers are informed of stock taking only one the day of checking. This promotes store-keepers to keep their records up to date.
5 The physical stock available in the store after counting, weighing etc. is recorded on sheets provided for this purpose.
Contact any of the accountant firm for your audit and accounting needs call us at 31 (0) 35-8200999 or you can visit here at - http://www.whitfieldd.com
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