9.11 identifying any stock gains and losses

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9.11 IDENTIFYING ANY STOCK GAINS AND LOSSES

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Page 1: 9.11 Identifying any stock gains and losses

9.11

IDENTIFYING ANY STOCK

GAINS AND LOSSES

Page 2: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Example: the Perpetual Inventory System at Rebel Sport shows that there

should be 50 footballs in stock.

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Stock item: Sherrin football IN OUT BALANCE

Date Reference Qty Cost Value Qty Cost Value Qty Cost Value

1 Apr Balance 20 30 600

30 25 750

Stock item: Sherrin football IN OUT BALANCE

Date Reference Qty Cost Value Qty Cost Value Qty Cost Value

1 Apr Balance 20 30 600

30 25 750

Stock item: Sherrin football IN OUT BALANCE

Date Reference Qty Cost Value Qty Cost Value Qty Cost Value

1 Apr Balance 20 30 600

30 25 750

Page 3: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

It is vary rare and unlikely that there wil l actually be 50 units in stock. There

can be:

Stock losses: where less than 50 footballs are on hand (i.e. the business

actually has fewer units of stock on hand than is shown on the Stock Card)

47 footballs counted during a physical stocktake

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Page 4: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

It is vary rare and unlikely that there wil l actually be 50 units in stock. There

can be:

Stock gains: where more than 50 footballs are on hand (i.e. when the business

actually has more stock on hand than is shown in the Stock Card)

52 footballs counted during a physical stocktake

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Page 5: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Stock Cards wil l only let management know how many items of stock are

supposed to be on hand

The only way to actually find out how many items of stock are on hand is to do

a physical stocktake

o In a Perpetual Inventory System , the purpose of doing a physical stocktake is

identifying discrepancies between:

Stock Card

How many should

be on hand?

Physical stocktake

How much is

actually on hand?

Vs.

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Page 6: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Doing a physical stocktake means a business can now identify stock

losses and stock gains

There are 3 possible outcomes from a physical stocktake:

PerfectPhysical stocktake

amount= =Stock Card

amount

Stock LossPhysical stocktake

amount= <Stock Card

amount

Stock GainPhysical stocktake

amount= >Stock Card

amount

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Page 7: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Example: the Stock Card at Rebel Sport shows 50 footballs on hand…

PerfectPhysical stocktake

50 units= =Stock Card

50 units

Stock LossPhysical stocktake

47 units= <Stock Card

50 units

Stock GainPhysical stocktake

52 units= >Stock Card

50 units

9.11 IDENTIFYING ANY STOCK GAINS

AND LOSSES

Page 8: 9.11 Identifying any stock gains and losses

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

TASK

In-class Homework

SQ17 X