October 30, 2016 admin

Inventory—Gas, Oil & Grease

Assets

INVENTORY—GAS, OIL & GREASE ASSET ACCOUNT
1443

ACCOUNT EXPLANATION
Cost of gas, oil and grease on hand.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Purchase of oil on open account P
    Inventory—Gas, Oil, & Grease 1443
      Accounts Payable—Trade 2100
             
  Oil change costed out at time of customer sale PS
    Cost of Sales—Gas, Oil & Grease 6780
      Inventory—Gas, Oil & Grease 1443
             
  Monthly adjustment to decrease inventory account to agree with physical inventory SE
    Cost of Sales—Gas, Oil & Grease 6780
      Inventory—Gas, Oil & Grease x
COMMENTS
  • At month end, gas, oil, and grease should be physically inventoried and the balance in this account should be adjusted through Account 6780, Cost of Sales—Gas, Oil & Grease, to agree with the physical inventory value.
  • Due to the nature of some of the inventory items carried in this account and the manner in which they are used, the cost of sales of these items can only be estimated, usually in relation to sales amounts.