Stock: Regarding Stock Adjustment in AutoCount Accounting v1.9/v2.0

From AutoCount Resource Center

1. Some support personnel may find it difficult to answer the following questions:

Q1. Why is AutoCount not allowing journal entries to adjust Stock account?

Q2. How if I want to adjust my total Stock value? (e.g. from RM100 adjust to become RM90)

2. The following explanation may help to explain or clarify some misunderstanding.

3. Let’s say the following table shows stock balance at the end of period:

Closing stock value is RM100.00 and it will be shown in financial reports as below:

4. When there is a stock loss (item stolen, spoilt…) or stock item being overvalued, a Stock Adjustment shall be properly recorded for the related items to reflect the true stock balance value:

Closing stock value after adjustment is now RM90.00 and it will be shown in financial reports as below: (reduce in Stock value will increase Cost of Sales thus reduce the profit.)

5. If you would like to see a Stock Loss appear as expenses, make the following Journal Entries:

     Debit     Stock Loss (Expenses)   10.00
     Credit    Purchase                                  10.00

And the financial reports shall appear as:

6. As refer to No.4, if you couldn’t identify items to be adjusted, you may consider creating a dummy item (such as Adjustment 2021) and make a Stock Adjustment (value RM10.00 only) to temporarily bring the value of stock balance down to RM90.00. You should, however, at the later time find out the actual affected items and make another adjustment to offset the adjustment of such dummy item.

7. Another option to No.6 is record a journal entry so that RM10.00 will appear as an expense and offset against Stock value at Balance Sheet:

     Debit     Stock Adjustment (Expenses)   10.00
     Credit    Provision for Stock Adjustment           10.00

And the financial reports shall appear as:

8. AutoCount Accounting does not allow any double entry on Stock Account because the value of stock account will read directly from Stock Value Maintenance, which matches the value from Stock Balance Report. This is to ensure that the stock value appear on financial reports always supported by (equal to) Stock Balance Report.

9. As a summary, we recommend all users to record proper Stock Adjustment (according to affected stock items) so that the itemized costing and stock reports will always tally with financial reports.