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STORES SUSPENSE HEADS SANJA UPRETI PAM

STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

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Page 1: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

STORES SUSPENSE HEADS

SANJA UPRETI

PAM

Page 2: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Stores suspense head is a Capital suspense head under demand no. 16.

Why should we operate a suspense head?

Page 3: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

The following heads are operated for recording the transactions of stores

•PURCHASES

•IMPORTED 7110

•INDIGENOUS 7120

•DGS&D 7130

•SALES 7140

•STOCK 7160

•SINT 7170

•STORES ADJ. A/C 7180

•MISC. ADVANCE CAP. 7310

Page 4: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

General rules for Debit and Credit

•Real Account

•Debit what comes in credit what goes out.

•Personal Account

•Debit the receiver credit the giver.

•Nominal Account

•Debit all expenses or losses, Credit all profits or gains.

Page 5: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

PURCHASE SUSPENSE 7110,7120,7130

•They are operated to account for the payment made for the procurement of all stock material. As the debits are received from the paying authority these are posted. The credits are received from the depots after the receipt of the material.

•At the time the advance payment is made

•PURCHASE SUSPENSE Dr.

•CHEQUES & BILLS Cr.

•When the material has been received at the depot, receipt note is sent to the Accounts office and the following entry is made.

•Stock Dr.

•Purchase suspense Cr.

Page 6: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

REVIEW OF PURCHASE SUSPENSE

•All items are current and those for which payments have been made and material is yet to be delivered.

•There are no debit payments except for those cases where advance payment ahs been done

The debit/credit items may be due to the following reasons.

•Unlinked debit/credit, wrong mention of RO numbers, PL numbers etc.

•Debit balances may be due to delayed preparation of RO’s

•Rejection of material.

•PVC bills lead to less valuation in the first bill.

Page 7: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

STOCK SUSPENSE, 7160

•All the materials available I the stores depot are reflected in the stock suspense account as debit.The debits are received with contra credit to

•Purchase suspense for materials procured.

•WMS for material manufactured for SS

•Revenue Heads material returned from the depots.

•Misc Adv. Capital Fabricated material.

•Deposit Misc. For stores received on loans.

•Stock Adj. A/C for adjustment in value

Page 8: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

……….contd.

The credits to stock suspense are received by contra debit to ;

•Sales Suspense. On sale of material

•WMS for issue of material to workshops.

•Revenue Heads for issue of material to divisions etc.

•Misc Adv. Capital issues for fabrication

•Deposit Misc. Stores issued on loan.

•Depot transfer account

•What will be the normal balance under Stock Suspense? What does it reflect?

Page 9: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Miscellaneous Advance Capital, 7310

This head is operated whenever material is issued from the stock to outside parties for fabrication.It is thus useful in monitoring the material which has been issued to outside parties for fabrication

When material is issued the entry will be

MAC Dr.

Stock Account Cr.

When material is received after fabrication entry will be

Stock Account Dr.

MAC Cr.

Separate budget provision is made for debit and credit.

Page 10: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Stock Adjustment Account, 7180

Its prime purpose is to record all variations in the book value of the stock which may occur due to revision of prices, stock verification etc.

It is maintained in 3 parts.

Part I Differences in Stock To be operated when the value difference is noticed between the priced ledgers and the actual physical availability of stock This head is operated after stock verification.

Part II Difference in value Due to revision of rates, on account of depreciation, market fluctuations etc.

Page 11: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Part III Miscellaneous items. It accounts for difference between the book value and actual value realised in auctions,sales, on account of leakages, breakage, theft etc.

Journal Entries

The debits and credits in STA are made by contra entries in the Stock Suspense, 7160.

This account is cleared every half year by affording debit/credit to the revenue heads in proportion of the issued made to the.

The clearance is done with approval of the GM.

Page 12: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Sales Suspense Head, 7140

•This is used to monitor the realisation of cash for all the material sold and account for the issues due to these sales.

•Normally in IR the sales are on cash basis then the flow of entries would be:

•cheques & bills Dr.

•Sales suspense Cr.

•When the material has been lifted then the entries would be:

•Sales suspense Dr.

•Stock suspense Cr.

Page 13: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

Stores in transit, 7170

•Materials are continuously neing transferred from one depot to another.

•When the stores from one depot are not received by the receiving depot then SINT is operated.

•Journal entry.

•SINT Dr.

•Stock Cr.

•When the materials have been received at the other end and received note prepared and the same received at the store issuing depot then

•Transfer Div./Rlys. Dr.

•SINT Cr.

Page 14: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

•What should be the normal balance in Purchase suspense.

•What does a credit entry reflect in Purchase Suspense.

•What does a debit entry reflect in Purchase Suspense

•What does a credit entry reflect in Sales Suspense.

•What does a debit entry reflect in Sales Suspense.

•What should be the normal balance in SINT suspense.

•What should be the normal balance in Stock suspense.

Page 15: STORES SUSPENSE HEADS SANJA UPRETI PAM. Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

PS

ADV. BILL.

MATERIAL RECEIVEDD.RO PREPARED

STOCK,7160

Dr.

CrDr.

ISSUES

Cr.

SALESSINT

RVENUEWMSMAC

Dr

WMSREVENUE

SAAMAC

DEPOT TRANSFER

Cr.

STORES RETURNED

Dr.