9.4 THE STOCK

CONTROL ACCOUNT

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Up to now we have recorded al l movements in and out of stock have been

recorded in the Stock Ledger

From now on al l stock movements must be recorded in the Stock Control

Ledger

9.4 THE STOCK CONTROL ACCOUNT

Stock [A]

Date Details $ Date Details $

Stock Control [A]

Date Details $ Date Details $

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

The Stock Control Ledger is an Asset and has the same rules of DEBITS and

CREDITS…

Stock Control [A]

9.4 THE STOCK CONTROL ACCOUNT

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

Which transactions wil l increase and decrease the Stock Control Ledger…

Stock Control

Stock Control balance will when…

Stock is purchased from suppliers

There is a stock gain

The owner contributes stock personally

Stock Control balance will when…

Stock is sold to customers

There is a stock loss

The owner withdraws stock personally

Stock is donated for advertising purposes

9.4 THE STOCK CONTROL ACCOUNT

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

What does a control account for stock mean? For debtors , us ing a Debtors Control

ledger meant…

General Ledger: total balance of debtors was stored in the Debtors Control ledger

Subsidiary Ledger: used to record the balance of each individual debtor

Debtors Control [A]

28/2 Sales/GST 4950

Debtors – M. Bennett [A]

1 /2 Sales/GST 2750

24/2 Sales/GST 220

Debtors – A. Griffith [A]

4/2 Sales/GST 1100

Debtors – R. Jones [A]

17/2 Sales/GST 440

27/2 Sales/GST 440

General Ledger Subsidiary Ledger

9.4 THE STOCK CONTROL ACCOUNT

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

For stock, using a control account means that…

General Ledger: the total balance of all stock is stored in the Stock Control ledger

Stock Cards: the balance of each individual unit of stock is recorded in the

relevant Stock Card for each item

Stock Control [A]

1/5 Balance 15000

General Ledger

Stock Cards

Stock Card: Collingwood Scarves

Date Quantity Cost Balance

1/5 800 10 8000

Stock Card: Essendon Scarves

Date Quantity Cost Balance

1/5 500 10 5000

Stock Card: Carlton Scarves

Date Quantity Cost Balance

1/5 200 10 2000

Subsidiary Record

Cross-checking mechanism

9.4 THE STOCK CONTROL ACCOUNT

© Michael Allison, Trinity Grammar School. Author’s permission required for external use

TASK

In-class Homework

SQ5 X

SQ8 X

SQ9 X

Ex9.7 X