Learn Inventory Management with Tally training in Chandigarh

Tally Training In Chandigarh : Let’s Become aware of inventory Management

Today, we will discuss about Inventory management with Tally Training in Chandigarh

Inventory Management : The dictionary meaning of inventory is ‘stock of goods’. The word Inventory is understood Differently by various authors. In accounting language it may mean stock of finished goods only. In a manufacturing concern, it may include raw material work in process and stores, etc.

International Accounting Standard Committee (I.A.SC) defines inventories as “ tangible property”.

1. Held for sale in the ordinary course of business.
2. In the process of production of such sale or,
3. To be consumed in the process of production of goods or services for sale”

The American Institute of certified Public accountant (AICPA) defines “ inventory in the sense of tangible goods, which are held for sale, in process of production and available for ready consumption”.

According to Bolten S.E., “Inventory refers to stock-pile of product, a firm is offering for sale and components that make up the product”

Elements of Inventory

Inventory includes the many things one of it is :

1. Raw Material : It includes direct material used in the manufacture of a product. The purpose of holding raw material is to ensure uninterrupted production in the event of delaying delivery. The amount of raw material will depends upon the various factors such as speed. Raw materials are to be ordered and procured and uncertainty in the supply of these raw material

I. Direct Material : Direct Material is the primary classification for raw materials in manufacturing operations. It is directly related to the final product. It is only the material that, after manufacturing processes are applied, ships out to a distributor or the final customer. If, e.g., Company manufacture hammers, than steel would be its primary direct material.

II. Indirect Material : Indirect Material is the class of materials in the manufacturing process that does not actually ship to the customer as part of the final product. For example, the gas used to heat the furnaces that melt the steel in the manufacturing of hammers, in an indirect material. Similarly, the water that cools the metal is also an indirect material

2. Work In progress : It includes partly finished goods and materials held between manufacturing stages. It can be also be stated that those raw materials which are used in production process but are not finally converted into final product are work-in-progress.

3. Consumables : These are the products with consumers can buy  Consumables are products that consumers buy continuous i.e, items which “get used-up” or  discarded

For example : Consumables are products that consumers buy recurrently, i.e. items which “get used-up” or discarded. For example Consumable office supplies are such products as paper, pens, file, folders, post it notes, computer disks, and tomer or ink cartridges. Not included capital goods such as computers, fax machines, and other business machines or office furniture.

4. Finished Goods: The goals ready for sale of distribution comes under this class. It helps to reduce the risk associated with stoppage in output on account of strikes, breakdowns, shortage of material, etc.

5. Stores and Spares : This category includes those products, which are accessories to the main products produced for the purpose of sale. For example, stores and spares items are bolts,nuts,clamps, screws, etc. These spare parts are usually bought from outside or sometimes they are manufactured in the company also.

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