the business is beginning inventory keeps shall be the sum of the values of the

balances or beginning inventories of al lof the card and the ending inventory
shall be the sum of the values of the ending balances of those same cards.
the use of the perpetual inventory keeps the business from having to halt it is
transactions to prepare the inventory at the end of the accounting period.
Supposing that the last working day of they perod is december 31 stall that has
to be done is to draw a single or double red line under the last transaction of
that day. The sum of al lof the balances of the card up to the red line Will give
us the ending inventory. This operation does not keep the business from
carrying out it is normal transactions.
one can perform this operation at any time in order to learn the inventory at a
given momento.
the reader must be aware that the inventory at the end of an accunting period
shall be the beginning inventory of the next perid.

ORDER COMMITTEO

Orden suppiller amount

Nº

Under ordered one enters in pencil, so that in can be casily erased, the orders
placed but not yet received accompanied by information on the supplier, the
number of the order, the quantity involved and the posible date of arrival.
Under committed one enters the amount of material whose sale or use is
practically ussured for the near future, this includes date on the number of the
pro forma submitted to the customer and on the amount of material calculated
for use or sale.
For auditing purposes, officials appointed beforehand can review the Kardex
file, which is usually located in the accunting departement, systematically
gather up a certain number of card, go to the warehouse and compare the
balances of the stocks with treir respective balances on the bin cards and at
the same time, verify whether the reported stock balance is the correct one.
SUMARRY
For purposes of simplicity no entry is made in de ware house or inventory or
merchandise account during the accounting period, that is to say, this account
does not comply with the double entry system.
Transations connected witd the purchase or sale of chandise are recorded in
the following accounts: purch sales, sales or purchases returns
In orden to have the warehouse account play a part in calculation of the gross
profit ( first part of the incometement), it is necessary to make valuated
inventories of stocks in the warehouse at the beginning and end of accounting
period.
The inventory at the beginning of the accounting period balanced in the
warehouse account by making.

The warehouse account is credited and the profit and loss summary is debited.

WAREHOUSE PROFIT AND LOSS

inventory inventory (1) inventory

at beginning at beginning at beginning
of the period of the perid (1) of the period

the balances of the sales and purchases accounts are ferred to the profit and
los summary.

PURCHASES SALES
balance of pucharses pucharses (2) (3) sales balances of