Inventory Systems (Grade 12 NSC Matric Accounting): Flashcards
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Definition of inventories/trading stock
Definition of inventories/trading stock
Goods purchased for resale to customers at a profit
Recording price for trading stock
Recording price for trading stock
Must be recorded at cost price, never selling price
Perpetual inventory system tracking method
Perpetual inventory system tracking method
Continuous, real-time tracking of inventory levels
Account type for trading stock in perpetual system
Account type for trading stock in perpetual system
Balance sheet account (asset account)
Periodic inventory system tracking method
Periodic inventory system tracking method
Tracks inventory at specific intervals, not continuously
Account type for purchases in periodic system
Account type for purchases in periodic system
Nominal account (expense account)
Cost of sales formula for periodic system
Cost of sales formula for periodic system
Opening stock + Purchases + Costs - Closing stock
Main advantage of perpetual system
Main advantage of perpetual system
Superior internal control with real-time stock information
When to use perpetual inventory system
When to use perpetual inventory system
Need tight control over inventory or valuable stock items
When to use periodic inventory system
When to use periodic inventory system
Low-value items, high volume, or limited resources