Basic concept of inventory

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Basic concept of inventory 

Accounting vouchers will update only Accounts, but Inventory vouchers will update both Accounts and Inventory. Inventory vouchers record the receipt and issue of goods/stock (Movement of goods), the transfer of stock between locations and physical stock adjustments. If you have not integrated accounts with inventory, inventory vouchers will not have any impact on the Balance Sheet stock figures. The stock balances will be maintained separately.

 

Raw material

Raw material is goods or products which are used in manufacturing or unprocessed products which are used in the creation of some final product

 

Working process

Material that has entered the production process but is not yet a finished product. Work in progress (WIP) therefore refers to all materials and partly finished products that are at various stages of the production process.

 

Finished Goods

The products in a manufacturer’s inventory that are completed and are awaiting to be sold. You might view this account as containing the cost of the products in the finished goods warehouse. A manufacturer must disclose in its financial statements the amount of finished goods, work-in-process, and raw materials.

 

Consumable

Goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. Consumables can also be defined as the components of an end product that are used up or permanently altered in the process of manufacturing, such as semiconductor wafers and basic chemicals. 

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