FNSACC405 Maintain Inventory Records ISBN Number: 978-1-925782-84-4 Part Number: 405UG Version: V18.8 2017 AUTHOR – Kerryn Maguire Kerryn has been working with accounting software products for over twenty years. Originally working from 1994 as an accountant with small business when accounting software became mainstream. Kerryn then focused on providing consulting and training services to small business in particular. Expanding from this into to providing curriculum based resources to TAFE and private RTOs. From this she established Microstar Publishing and more recently incorporated OfficeLink Learning to provide a wide range of resources for the Accounting and Business Services Certificate courses. Kerryn has a long association with many TAFEs and RTOs across Australia. Kerryn’s fundamental aim is to provide resources that are easy to understand while providing a practical application of skills acquired. Kerryn also co-authors two titles for Cambridge University Press which are in their 4 th Edition – first published in 2000. Kerryn has considerable experience and knowledge: Bachelor of Applied Science Mathematics Diploma of Education Graduate Diploma of Accounting CRI: Criterion Referenced Instruction Member of Institute of Certified Bookkeepers Member of VELG Reproduction and Communication for educational purposes The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10% of the pages of this publication, whichever is greater, to be reproduced and/or communicated by any educational institution for its educational purposes provided that the educational institution (or the body that administers it) has given remuneration notice to the Copyright Agency Limited (CAL) under the Act. For details of the CAL license for educational institutions contact: Copyright Agency Limited Level 15 233 Castlereagh Street Sydney NSW 2000 Telephone: (02) 9394 7600 Facsimile: (02) 9394 7601 Email: [email protected]Sample for Review
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FNSACC405
Maintain Inventory Records ISBN Number: 978-1-925782-84-4
Part Number: 405UG
Version: V18.8 2017
AUTHOR – Kerryn Maguire
Kerryn has been working with accounting software products for over twenty years. Originally working from 1994 as an accountant with small business when accounting software became mainstream. Kerryn then focused on providing consulting and training services to small business in particular. Expanding from this into to providing curriculum based resources to TAFE and private RTOs. From this she established Microstar Publishing and more recently incorporated OfficeLink Learning to provide a wide range of resources for the Accounting and Business Services Certificate courses. Kerryn has a long association with many TAFEs and RTOs across Australia. Kerryn’s fundamental aim is to provide resources that are easy to understand while providing a practical application of skills acquired. Kerryn also co-authors two titles for Cambridge University Press which are in their 4th Edition – first published in 2000. Kerryn has considerable experience and knowledge:
Bachelor of Applied Science Mathematics Diploma of Education Graduate Diploma of Accounting CRI: Criterion Referenced Instruction Member of Institute of Certified Bookkeepers Member of VELG
Reproduction and Communication for educational purposes
The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10% of the pages of this publication, whichever is greater, to be reproduced and/or communicated by any educational institution for its educational purposes provided that the educational institution (or the body that administers it) has given remuneration notice to the Copyright Agency Limited (CAL) under the Act. For details of the CAL license for educational institutions contact:
Unit 1 Introduction ......................................................... 1 Purpose of this workbook ......................................................................... 1
Relationship to Competency Standards ........................................................ 2
What you will need ................................................................................ 2
Conventions used in this User Guide ........................................................... 3
Symbols used in this User Guide ................................................................ 4
Installing AccountRight Plus 2017.1 on a Windows PC ...................................... 5
Backing up your company file ................................................................. 12
Glossary of terms ................................................................................ 14
Unit 2 Setting up inventory using AccountRight .................... 15 Learning outcomes ............................................................................... 15
About Accounts NOW ............................................................................ 16
Notes on Inventory ............................................................................... 17
Business Reporting Requirements ............................................................. 18
Starting AccountRight Plus ..................................................................... 19
Customising the Accounts List ................................................................. 20
Unit 5 Using Periodic Inventory in AccountRight ..................153 Learning outcomes .............................................................................. 153
Setting up accounts for item cards for periodic inventory .............................. 154
There are two methods of accounting for inventories (or valuating stock):
1. Periodic (also known as Physical) Inventory
Items are bought and sold however; no record is kept of the number and value of items on hand.
Periodic Inventory is covered in Unit 5.
2. Perpetual Inventory
Items are bought and sold, AND a record is kept of the number and value of items on hand.
Perpetual Inventory offers the following advantages.
• The number and value of stock on hand is always available.
• The Gross Profit figure in the Profit and Loss Statement is accurate.
• Many inventory reports can be printed so that profit margins can be checked regularly; stock levels controlled, and stock shortages can be detected.
Accounts NOW will use Perpetual Inventory to track the following.
• The number of printed manuals on hand
• The number of printed manuals with a plastic pocket, data CD and Test Drive packed ready for resale (using the auto-build feature)
• The number of Software and Test Drives on hand.
Accounts NOW will use Periodic Inventory to record the purchase and sale of mouse pads. This item is often given to clients as a gift or used in the office.
You will first review the existing Accounts List and make the changes required to meet the needs of the business. Some accounts need to be amended and others need to be added
Below is an edited Accounts lists with the accounts that need to be added/changed highlighted in bold.
Edited Accounts List
1-0000 Assets 1-1000 Current Assets (Header account)
1-1100 Chq A/c – NAB 123456
1-1110 Undeposited Funds
1-1120 Electronic Clearing Account
1-1200 Payroll Clearing Account
1-2000 Accounts Receivable (was Trade Debtors)
1-3000 Deposits with Suppliers
1-4000 Inventory
2-0000 Liabilities
2-1000 Current Liabilities (Header account)
2-1050 Business Credit Card (Account Type = Credit Card)
1. Click on the zoom arrow to open the account that needs amending and change the Number and/or Name.
2. For example, click on for 1-1000 Cheque Account
3. Click into the Account Number box and change it to 1-1100 and then click into the Account Name box and change it to be Chq A/c – NAB 123456 and then click on OK
To create a new account
1. Click on the New button.
2. Select if the new account is a Header or Detail Account. Header accounts are used to group detail accounts. You cannot post transactions to header accounts.
3. Type the Account Number and Name.
4. For example, 1-1000 Current Assets is a Header account so Click on Header
5. Type the second part of the Account number 1000
7. In the Details tab of each Header account you edit or create, select the When Reporting, Generate a Subtotal for This Section option.
8. Click on OK
Note: When you are entering new accounts remember to click on the
Details tab and apply the tax code – N-T is most cases for Asset and Liability accounts. GST in most cases for Income, Cost of Sales and Expense accounts. You will check these codes in the next task.
Checking tax codes
The easiest way to check or add tax codes is as follows:
1. In the Command Panel (located at the bottom of Command Centre), select Reports, and then select Accounts reports.
2. Select the Accounts List [Summary] and then click Display Report.
3. Click on the Insert/Modify tab, choose to Show the Account No. and the Tax code and then click OK.
We need to ensure the correct accounts are used to track freight charges collected and paid, to track items received without an invoice and to track deposits paid to suppliers. To do this, we need to set up some linked accounts.
To setup Sales Linked Accounts
1. Click Setup in the Menu Bar and select Linked Accounts, then Sales Accounts.
2. Click on I charge freight on sales
3. Type 4-4000 in the link box and TAB then OK
To setup Purchases Linked Accounts
1. Click Setup in the Menu Bar, select Linked Accounts and then Purchases Accounts.
2. Link Receive items without a Supplier bill to 2-2100 A/P Accrual - Inventory
Accounts NOW want to track the following information:
• number and value of items purchased
• number and value of items sold
• number and value of items on hand
• items which fall below minimum levels on hand
• where items are stored
• average cost of each item (weighted average)
• profit margins for each item.
Before creating your item cards, item numbers must be considered.
Planning Item Numbers Designing your Item Numbers is very important. Some thought should be given to your numbering system before creating your Item Cards.
There is provision for 30 characters/numbers in your item number.
Accounts NOW’s numbering system is built on the basic design below – using 6 characters/numbers only.
The first character indicates if the item is purchased or is built: P = Purchased A = Auto-build
The second character indicates the type of item: M = Manual S = Software O = Other
The third, fourth and fifth characters will indicate the name of the manual or software. PFB = PALER for Beginners
The sixth character will indicate the version: 3 = Version 3
P
F
B
Note: Some businesses use the purchasing item number as their sales item number, however this can be a problem if the supplier changes the item number or the seller changes the supplier.
Link these preferences to the accounts shown below.
Note: Linked accounts for buying, selling and inventory. When an item is received into the store, the value is added to Inventory. When an item is sold, the average cost is deducted from Inventory and posted to Cost of Sales and recorded in Sales at the selling price.
4. No details will be entered in the Item Details tab.
This manual is purchased from the printer however; the manual cannot be sold in this form. A Test Drive, plastic pocket and a data CD must be added to the book for resale.
Therefore, this item will be purchased (select I Buy) and inventoried (select I Inventory) only - not sold (do not select I Sell).
a. Type in the following Profile details:
b. Enter the Buying Details:
With the Item still displayed click on New to enter the next item –
many of the selections will already be made.
The business orders 15 copies of this workbook every time they order.
• Bought in packets of 10 and 1 is placed in the back of each PALER for Beginners Workbook only.
• The Test Drive is not placed in the back of the PAYROLL or ADVANCED Workbooks because users already have a Test Drive when they purchased the Beginners workbook.
• The re-order quantity of 15 is printed in the Qty column.
• The Supplier’s item number has been printed, not the item number you use in Accounts NOW.
• No price has been entered because these items have not been purchased since the company file was set up. AccountRight uses the last cost price automatically, unless the standard cost option is activated (covered later in this workbook).
• There is no Delivery Method or Date Required showing.
We will now add the prices and details before the order is emailed to Kwik Kopiers.
1. In the To Do List, click Orders.
2. Click next to the order we just created to open it.
3. In the Purchases – Edit Item window, add the following information.
a. Prices to be entered are GST Inclusive, so select the Tax Inclusive option.
b. In the Price column enter the following new prices:
PALER for Beginners V3 new cost to print/bind $23.10
4. Click Send To, select Email and click OK to the prompt that the Order will be recorded before sending.
5. In the Email window, enter other information if needed.
6. To send the email, you would click Send. The email would be sent to the Outbox of your email program, with the purchase order as an attachment. For this exercise, click Cancel.
7. Close the To Do List to return to the Command Centre
1. Click To Do List then click the Stock Alert tab.
2. Select the 700MB CDR and CD Adhesive pockets and then click Order/Build.
3. Set the order date to 5/01/2019.
4. Ensure the order is tax inclusive and enter the buying prices:
CDs (10 spindles) $15.00 per spn including GST
Adhesive pockets (5 boxes) $77.00 per box including GST
Total Amount = $535.00.
5. Click Record. Do not print.
Creating the order for software
1. In the Stock Alert window, select PALER Accounting V3, PALER Accounting with Payroll and PALER Test Drive V3 and then click Order/Build. The Purchases - New Item window appears.
Note: No restocking quantities were entered for PALER Accounting or PALER Accounting with Payroll, but AccountRight has automatically ordered the number required to make the minimum number as per the Buying Details tab of the Item Information window (shown below).
1. In the Purchases Command Centre, click Pay Bills to pay for the order on the credit card.
2. Click in the Supplier box and start to type Computer Software Supplies until the name appears and then press TAB
3. Change the Pay from Account to be Business Credit Card
4. Change the date to be 5/01/19 – the same as the Order date
5. Enter the invoice Amount of 3,405.00 in the Amount box
6. Click in the Amount Applied column.
7. Press TAB. The Out of Balance amount should show $0.00.
8. Click Record.
9. Click on Cancel to return to the Command Centre.
Important: Backup your company file You may need this backup if you make errors on the following pages. To identify the backup later, record the name here.
1. In the Inventory Command Centre, click Transaction Journal.
2. Click the All tab and enter the dates from 1/01/2019 to 5/01/2019
Your Journal should look like this:
Note the following:
• No entries have been made for purchases because all three orders are orders only, and the goods have not been received, therefore no money is owing.
• The Credit Card payment has credited the Credit Card Account and debited Deposits with Suppliers because your business will not owe the money until the goods and/or invoices are received.
3. Close to return to the Command Centre.
4. Click on Items List to display it. Note that the numbers of stock on hand have not been altered because the items have not yet been received.
6. Enter $26.50 inc GST Freight at the bottom of the invoice.
7. Change the price of CDs to $17.05 inc GST per spindle.
8. Only three boxes of pockets were received so type 3 in the Bill column and TAB to Backorder and type 2 to put the remaining two on backorder. The order should look like this.
9. Check the total of $428.00, then Record the purchase. No need to print. The items on backorder will remain in Order Number 2.
Recording the delivery of purchase 003
The items on purchase order 003 have now been received.
The Tax Invoice has also been received. All details are correct.
1. Open purchase order 003.
2. Click Bill.
3. Change the date to 10/01/2019.
4. Enter the supplier’s invoice number S114.
5. Record the Bill. Do not print.
6. Close the To Do List to return to the Command Centre.
1. View the Transaction Journal (ALL Journals) from 5/01/2019 to 10/01/2019. Excluding the initial opening balance transaction, the transaction journal should look like this:
2. Check the accuracy of your data.
3. If you find an error, open the transaction and make the required adjustment.
4. If you cannot fix the error, delete the transaction and re-enter it.
5. Close the Transaction Journal
When Order 3 was recorded, the amount of money being held in ‘Deposits with Suppliers’ was transferred to Accounts Payable and paid to Computer Software Suppliers.
6. View your Items Lists. The number of items on hand has now been
updated and the Last Cost recorded.
Important: If you find that some of your amounts are not exactly the same as the book, even though you are sure you have keyed in transactions accurately, it may due to minor error corrections you mad along the way.
For example, if you edit a sale and make a change, like add freight, amounts will automatically recalculate using current weighted average costs. So sometimes differences can occur.
7. Click on Print to print the Items List [Summary] report
There are now 295 CDs on hand. 45 (stock take figure) + 10 spindles of 25 each = 295. The last purchase price was $17.05 spindle including GST. * indicates price includes GST.