Store (Inventory) Accounting

Store accounting is the branch of accounting that records and controls the receipt, issue and balance of materials (goods) kept in the store of an organisation. It maintains bin cards and stores ledger so that the quantity and value of every item in stock is always known.

It helps in the systematic recording of all goods received and issued, and it helps in preventing theft, loss and misuse of materials by keeping a proper check on stock.

A form used to request the issue of materials from the store.

An inventory requisition form (also called a material requisition form) is a document sent by a department to the storekeeper to request the issue of a specific quantity of materials. It records details such as the date, the department asking for the goods, the description and quantity of materials needed, and the signature of the authorised officer. It acts as the basis for issuing materials and for recording them in the bin card and stores ledger.

A purchase order is the written order a store or office sends to a supplier asking it to supply stated goods in a stated quantity, quality, price and delivery time. In Nepal's government accounting system it is one of the numbered forms of the stores (jinsi) procedure, issued after the demand (requisition) is approved, and the goods received are then recorded through the goods received report.

Two examples of office stores items are:

1. Stationery and printing materials (paper, pens, files, ink and toner).
2. Cleaning supplies and postage stamps.

Two objectives of store accounting:

1. To keep an accurate record of the quantity and value of goods received, issued and in stock.
2. To prevent loss, theft and misuse of stores, and to help control stock levels so that shortage or excess stock is avoided.

A purchase order is a written order sent by the purchasing office to a supplier, asking for the supply of specified goods or services of stated quantity, quality, price and delivery terms.

(1) Store accounting keeps a continuous record of the quantity and value of materials received, issued, and held in store, so that stock is not over-purchased or under-stocked.
(2) It fixes the responsibility of the storekeeper for any loss, damage, or theft of materials by comparing the bin card (quantity record) with the store ledger (quantity and value record).