Bar Stock and Cash in Hand

[gjwguk]

It’s coming to the end of the accounting year for a Village Hall and I am trying to tie up loose ends.
The bar stocktake and cash in hand from last year. How should these be entered? Should they be journalized as an asset?
I have no accountant to advise

[ian_roberts]

Assuming you’ve been entering your purchases of stock during the year as “general purchases” then the way to handle the value of stock in hand at the year end is to make a journal on the last day of the year with that value as a credit to “closing stock” and a debit to “stock” (which is a balance sheet code). This will then show up on your profit and loss as “general purchases” of £x minus “closing stock” of £y, with the difference listed as the final cost of sales for the year, and the value of the stock in hand will appear on your year end balance sheet.

For the following year you’d do the same but the stock journal would have four lines instead of two:

• debit “opening stock” and credit “stock” for the value of stock held at the end of the previous year
• credit “closing stock” and debit “stock” for the value of stock held at the end of this year.

This then shows the cost of sales for the year as opening stock plus purchases minus closing stock, i.e. what you had at the start of the year, plus what you bought in, minus what you had left at the end.

---

For cash in hand how have you been accounting for cash during the rest of the year? The usual way to deal with cash sales is to maintain a “bank” account in QuickFile representing your cash in hand at any given time (I just use the default “petty cash” account). When you receive payment in cash you record that as a payment into the cash account, and when you pay the cash into the bank that is simply a “bank transfer” from the cash account to the current account - you don’t record the current account transaction as payment from a customer as you’ve already done that when you received the cash. If you’re recording things this way then there’s no need to adjust anything at the end of the year, the balance on the cash account at any date is always equal to the cash you have in hand at that time.