Rules for recording inventory transactions

Rules for recording inventory transactions

The sale of goods shall be recorded on the dispatch of goods.
Purchase of goods should be recorded on the earlier of
a)Receipt of goods (or)
b)Receipt of invoices(assuming that the goods are in transit with our carrier.
            
               Normally sales are recorded during the year on the preparation of the sales invoices. Similarly, purchases are recorded during the year on the preparation of the purchase invoice. In such cases following adjustments are required at the year-end.

1. Goods and invoice both are received=no actions required (owned)
2. Goods received but invoice not received=Record purchases(owned)
3. The invoice received but goods, not received=Include in closing stock assuming that goods are in transit with our own transporter.
4. The invoice received but goods not received with information that goods are with supplier's transporter=Reverse the recorded purchases
5. Goods and invoice dispatched=No actions required.
6. Goods dispatched but invoice not made=Record sales 
7. Invoice made but goods not dispatched=Reverse any recorded sales

 Goods dispatched but not delivered means goods in transit

Categories: Rules for recording inventory transactions