Notes

chapter 8

zero cost ; in this method , the value od inventory is taken as zero . generally the item , which can not be sold is value at zero cost

2 average cost : under the average approach m both inventory and that cost the cost of goods sold are based upon the average cost of all unit received in stcok

3 fifo : under fifo, the the cost of goods sold upon the based upon the cost of material bought earliest in the period while the cost of inventory is based upon the cost of material bought later in the year. this result in inventory being value in the current replacement cost

4 : fifo perpetual : under the perpetual system the inventory account is constantly ( os perpetually ) changing when retailer purchases merchandise, the retailer debit its inventory account for the cost , when the retailer sells the merchandise to its customer its inventory account is credited and its cost of good sold rather than staying dormant and it dose with the periodic method the inventory account balance is continuously updated

5: with perpetual fifo : the first and oldest cost are the first move from the inventory account and debited to the cost os goods sold account . the end result under perpetual fifo in the same as under periodic fifo . in the other words the first cost are the same whatever you move the out od inventory with each sale ( perpetual ) or weather you wait until the year is over (periodic )

6: last purchased cost : this method value the inventory based on the replacement cost of item . thus the method uses the last purchased price for a product to determine the total value of that product

7 : lifo annual : tally assume the sale of newest goods first taking into account the current financial year

8 lifo perpetual :with perpetual lifo the last cost are the first moved from the inventory account and debited to the cost of goods sold account . the end result and the perpetual lifo is a same as under periodic lifo in other word the last cost are the same wether you moved cost out of inventory with each sale (perpetual) or whether you wait until the year is over (periodic)

9 montly average cost : under this method, both inventory and the cost of goods sold are based upon the average cost of all units received in the stock during the month

10: standard cost : under this method both inventory are the cost of goods sold are based on the standard fixed cost assigned to the item within the item manager at the time of reporting

11: ignore negative balances : if outward quantity is a greater than inward quantity usually it shows negative balance, but in case of acceptance of this option negative quantity will be ignored in the report

*****************TREAT ALL REJECTION INWARD AS A SCRAP ********************
this is another useful section in behaviour section . it is useful especially for the perishable goods goods whicj have to be scraped when it reject due to some manufacturing defect set the option treat all rejection inward as scrap to yes while creating an item . for scrap treatment never use previous Challan no

till this part we have learnt the normal procedure of purchase and sales entries . in practicle life we have to face some complication during the time of passing entries . few addtional features may be added in regular voucher . now we will discuss about some other feature

********************ACTUAL BILLED QUANTITY ******************
tally support account with inventory allocation means value = quan*rate so every inward or outward quantity is multiplied by rate but if you are to accounting any free quantity this option will be switched on through F11-F12 ( inventory feature actual =billed + free quantity .

**************PRICE LIST**********************
price list is a pre-defined price declaration statement of diff goods with diff quantity for huge value volume of sales we can set price according to product and their antiquity // if anyone select any order at a specific quantity rate will come automatically . this price in not editable . price list can be set for different price level also . you can declare the rate style for wholesaler another style for retailer etc

***********************CREDIT LIMIT *****************
a credit limit is the maximum amount of credit that company or or other lender will extent to a debtor for a particular line of credit ( some times called a credit line , kine of credit, or a trade line )for example the maximum as a credit card . company will allow a card holder to borrow at any given point on a specific card . tally allows this feature under sundry debtor if you switch on "budget control " option F11-F1
(Accounting features ) you will get credit limit of debtors .

********************STANDARD RATE ***********************
it is a comparison price of homogeneous goods in a goods in a same industry .you can get a standard price for a particular product , which comes automatically in invoice , but you can modify the same . it comes from configuration inventory master (F12)

****************NEGATIVE STOCK WARNING *************
in any correct accounting system , stock cannot go negative .to prevent such a mistake in accounting , at invoice configuration , set yes at warn on negative stock balance

consequently during voucher entry , you get a warning if the current voucher would cause negative stock balance of any item . if you still like to enter the inventory voucher allowing the stock to negative press enter to save voucher

*************************REORDER LEVEL ******************
it is level of stock at which a replenishment order should be placed . traditionally "optimizing " system system use variation on the computation of maximum usage multiplied usage by maximum lead . which built in a measure of safety stock and minimise the likelihood of a stock
Terminology
1 : Minimum stock : amount of stock required to support testing operation until additional supplies are received
2 : Lead time : time between placing an order and receiving it
3 : Maximum usage :no of test devices used in a given time period