Top 2 Stock Records Used in Stock Control | Cost Accountancy

The following points highlight the top two stock records used in stock control. The records are: 1. Bin Cards 2. Store Ledger Card.

Stock Control: Stock Record # 1.

Bin Cards:

Meaning of Bin Cards:

In a store, materials are kept in appropriate bins, drawers or other receptacles; some are stacked while other racked. For each kind of material, separate record is kept on a bin card. Details of receipts and issues of materials are shown on the bin card. Bin card also assists the store keeper to control the stock.

On the bin card the maximum level, re-ordering and minimum levels are maintained. Where the stock clerk is responsible for reordering material, he is reminded by the bin card when the stock reaches the minimum level to ensure that production departments do not starve from paucity of stock.

To facilitate ordering of further supplies, the normal quantity to order is sometimes stated at the head of the card. Where bin cards are in use, they are attached to or adjacent to the actual materials and the entries are made at the time of issue, either by the store-man or a store clerk.

Necessity of Bin Card:

It is often argued that the bin card is an unnecessary duplication of work. Undoubtedly it is a duplication of work, but it is advantageous to maintain both the sets of records for the following reasons:

(i) Since Bin Cards are not accounting records, it is essential that these be kept in stores.

(ii) In Store Ledger, posting is made periodically so it fails to show the up-to-date balance of the stores materials.

(iii) Store Ledger constitutes a second check on the quantity recorded on the Bin Cards.

(iv) In case of discrepancy in regard to materials, store clerk may be held responsible for such discrepancy.

(v) Store Ledger is maintained centrally in the Cost Office from where consolidated information regarding stock position of the materials can be obtained.

(vi) An overall review of stores balances can frequently be made.

(vii) Maintenance of Bin Cards facilitates the continuous flow of stores of materials to production departments.

To conclude it can be said that the necessity of maintaining bin cards will depend on the proximity of the stores records office to the store and the accuracy and speed with which stock control records are updated.

Merits of a Bin Card:

1. Effective control of stock:

Bin Card records all receipts and issues of materials in detail. So a detailed record is made in the Bin Card regarding quantity of materials received and issued on different dates. Moreover, it assists the store keeper to control the Stock effectively. He can keep a constant vigil on the position of materials since the maximum reordering and minimum levels are stated on the Bin Card.

2. It facilitates ordering of further supply:

When the quantity of materials reaches Re-ordering level, the storekeeper places order with the Purchase Department asking for fresh supply.

3. It feeds the production departments with regular supply of materials:

This is possible because of strict observance of Maximum, Reordering and Minimum levels of each type of material-with the help of Bin Card. As a result, production is seldom hampered.

4. It helps perpetual inventory system:

It is a part of perpetual inventory system. So, it has a positive contribution to make the perpetual inventory system successful.

Treatment of Discrepancies:

A continuous record of materials is maintained in a perpetual inventory system in the form of bin cards and store ledger. Under this system any discrepancy in physical stock and accounting stock can be detected very quickly.

The discrepancies may arise for any one of the following reasons:

(i) For wrong entry or omission of an entry;

(ii) For materials not being placed properly;

(iii) Inaccurate counting, weighing at the time of receipts or issues;

(iv) Losses due to shrinkage, evaporation, spoilage, breakage etc.

(v) Losses due to theft, manipulation, pilferage and misappropriation.


Discrepancies are required to be adjusted. But before making any adjustment, the reasons for such discrepancies must be studied carefully and should be reported to the proper authority. Approval from the appropriate authority should be obtained for adjustments.

Discrepancy arising out of normal circumstances like evaporation, shrinkage etc. should be adjusted by transfer to the Inventory Adjustment Account. But discrepancies due to abnormal circumstances like fire, theft etc. should be charged to costing Profit and Loss Account.

Stock Control: Stock Record # 2.

Store Ledger Card:

Meaning of Store Ledger:

Stores Ledger Card is the key to stock control, as it is the basic record used to maintain optimum stock levels. Moreover, it provides the detail necessary to ascertain accurate stock values and to check physical stocks. To obtain a full picture of the stock position of an item it is necessary to know not only the physical stock balance but also the Free Stock Balance.

It is to be remembered that in all cases the pattern of demand is not easily determined, e.g. new materials, or where it is erratic, For such materials, as soon as an order is received from a customer, detailed material requirements are sent to the stores and stock of such materials are reserved against those orders so that materials are available for production.

Thus, the free stock is reduced by the quantity of reserved materials. When the free stock falls below the re-order level, then purchase requisition is sent to purchase department. Free Stock Balance may be defined as Physical Stock + Outstanding replenishment order – Unfulfilled requirements.

A typical Stock Record Card is shown below:

Store Ledger Card

Store Ledger is maintained in the cost department. It is more or less identical with the bin cards with the exception that money values of materials are shown in Store ledger. Store ledger is used to record all receipts and issues of materials to different production departments.

The ledger is usually of loose leaf or card type and contains an account for each class of material. This ledger is a subsidiary ledger to the main cost ledger.

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