The record is continued by daily postings of sales and by a weekly posting or entering of the stock on hand. Orders are entered on the day they are placed.
Form 43. Stock Control Card
Taken from Bulletin issued by the
United States Chamber of Commerce
With such a stock record a perpetual inventory is maintained and control over the movement of merchandise is secured.
Problems Connected with the Merchandise Inventory.—Proper accounting for merchandise at the time of inventory-taking and the close of the fiscal period requires a consideration of the following points:
Goods in Transit. It may happen that certain goods have been ordered during the period, and that the invoice has been received but that the goods themselves are still in transit. The question whether or not such goods shall be included in the inventory may be viewed from different angles, as follows:
1. If the goods have been paid for in advance, they have undoubtedly been entered on the books as a charge to Purchases. If this is the case, the goods in transit must of course be included in the inventory as if actually received.
2. If the goods are still in transit but have not been paid for, it is customary not to charge them to Purchases until they arrive. If not charged to Purchases, or other similar account, they must not be included in the inventory. However, theoretically, this method is incorrect. The fact that the goods have been ordered and are now in transit makes the business liable for their purchase price, and although not actually received, in reality they form a part of the asset merchandise. It is true that until the goods are received, inspected, and accepted, the purchaser has the privilege of refusing them if they are not as ordered, but this privilege is exercised only in exceptional cases. Generally speaking, therefore, it is better to consider such goods as a completed purchase, include them in the inventory and credit the vendor for the amount of his invoice. Instead of being charged to Purchases account, such goods may be charged to Purchase Commitments which will better indicate their status.
Goods Received but not yet Booked. In concerns where a separate shipping and receiving department is maintained, it may happen that the goods received by this department are not immediately transferred to stock or storage, in which case they may not have been taken up on the books. At the end of the period it is important to see that all such goods are properly recorded as purchased and are included in the inventory.