October 30, 2016 admin

Inventory Control & Data Processing—Parts

Expenses

INVENTORY CONTROL & DATA PROCESSING—PARTS EXPENSE ACCOUNT
7690

ACCOUNT EXPLANATION
Costs of perpetual inventory control service and data processing service and of physical inventories of parts when such services are purchased from outside vendors.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Vendor invoice for monthly automated parts inventory control and data processing service P
    Inventory Control and Data Processing—Parts 7690
      Accounts Payable—Trade 2100
             
  Monthly accrual for annual physical inventory data processing service SE
    Inventory Control and Data Processing—Parts 7690
      Accrued Other Expenses 2423
             
  Annual physical inventory data processing service billed by outside firm at less than accrued amount P
    Accrued Other Expenses 2423
      Accounts Payable—Trade 2100
      Inventory Control—Parts 7690
COMMENTS
  • Salaries of dealership employees whose duties include maintenance of parts inventory records, cycle-checking of parts on hand, or annual physical inventories of parts should be charged to Account 7610, Salaries—Other—Parts, and should not be charged to this account.
  • Outside services should be contracted on a competitive bid basis with due consideration of the effectiveness and reliability of the bidders.
  • Advice of tax counsel should be obtained regarding accrued expenses remaining unpaid at year end.