Tag Archives | Materials

Notes on Scrap | Materials

The below mentioned article provides a note on scrap. Scrap is the residue material that has a recovery value. It is incidental residue from the materials used in manufacturing operations which is recoverable and measurable without processing. Accounting of Scrap: The accounting treatment of scrap is based on the following considerations: (a) If the value […]

Notes on Defectives | Materials

The below mentioned article provides a note on defectives. Defectives represent the part of production that does not meet dimensional or quality specifica­tions of a product but which can be reworked by additional application of material, labour and/ or processing and made it into saleable condition either on first or seconds depending upon the characteristic […]

Notes on Spoilage | Materials

The below mentioned article provides a note on accounting and control of spoilage. Meaning of Spoilage: Spoilage is the production that fails to meet quality or dimensional requirements and these are so damaged in manufacturing operations that they are not capable of rectification economically and hence taken out of the process and disposed off without […]

Documents Required for Purchasing Stores Routine | Cost Accounting

The normal process of purchasing, storing, control and issue of materials consists of the following documents:- 1. Bill of Materials 2. Purchase Requisition 3. Purchase Order 4. Material Inspection Note 5. Goods Received Note (GRN) 5. Goods Received Note (GRN) 6. Stores Requisition Note 7. Material Transfer Note 8. Material Return Note 9. Bin Card […]

Accounting Notes on Waste | Materials

The below mentioned article provides a note on waste. Meaning of Waste: Waste is a material loss during production or storage due to evaporation, chemical reaction, unrecoverable residue, shrinkage etc., wastage may be visible or invisible wastage. Wastage may be normal waste incidental to manufacturing activities or abnormal waste which is in excess of material […]

Quick Notes on Inventory Control | Cost Accounting

After reading this article you will learn about: 1. Meaning of Inventory Control 2. Classification of Inventory Control 3. Commonly used Inventory Control Items 4. Stock levels 5. Levels of Materials. Meaning of Inventory Control: Inventory control can be defined as the system used in a manufacturing concern to control the firms investment in Stock. […]

Store Keeping: Importance, Functions and Organization

In this article we will discuss about Store Keeping:- 1. Importance of Store-Keeping 2. Functions of a Store-keeper 3. Organisation of Stores 4. Store Layout 5. Centralised Stores. Contents: Importance of Store-Keeping Functions of a Store-keeper Organisation of Stores Store Layout Centralised Stores 1. Importance of Store-Keeping: The cost of materials is one of the […]

Purchasing of Materials |Cost Accounting

After reading this article you will learn about: 1. Introduction on Purchasing of Materials 2. Centralised and Decentralised Purchase 3. Purchase Routine 4. Purchase Requisition 5. Specification of Materials or Bill of Material 6. Time of Purchase 7. Purchase Quantity 8. Purchase Order 9. Purchase Procedures and Others. Introduction on Purchasing of Materials: In a […]

Top 3 Types of Inventory System | Cost Accountancy

The types are: 1. Perpetual Inventory System 2. Continuous Physical Stock Taking Inventory System. 3. Periodic Stock Verification. Inventory System: Type # 1. Perpetual Inventory System: Definition: In the words of Wheldon: “Perpetual Inventory System may be defined as a method of recording store balances after every receipt and issue, to facilitate regular checking and […]

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 […]

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