Hi. I am checking all of the entries on the stock code 1001 for a business that deals with servicing mobility scooters, buying new or second hand scooters from customer requests which he then sells to them. Tyres, batteries, parts etc have been coded to 1001. All of the purchases for these items over the last year have been coded to 1001 as stock. I took over bookkeeping in August. If the scooters are then sold on and there are none in the workshop then How do i account for them as they are no longer stock but sales (the invoice for which has been coded to Sales). This also goes for purchases of other related scooter items ie parts which he then uses. Do I need to get a rough list of stock from him as of now but then how do i treat the double entry to credit the stock code. what is the debit ? Thanks
I don’t think I’d put any of it down as stock, it’s just materials on hand basically. Stock would be more for actual stock on the shelf in a shop/warehouse.
Are these all parts which are sold with the scooters - or are they parts he keeps separately and uses for repairs, maintenance etc. of the scooters? Personally, I would code them to Purchases. If he holds a significant amount of stock, he will need to do a stocktake each year-end and you can then adjust for opening and closing stock in order to calculate the cost of goods sold.
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