What is Insufficient inventory? Why do businesses need to take insufficient inventory and come up with appropriate options? How to deal with insufficient inventory when insufficient inventorying? Viet An tax agent will introduce how to handling of insufficient inventory during stock count in Vietnam.
What is insufficient inventory?
According to Vietnam Accounting Standards (VAS 02), insufficient inventory is defined as follows:
- Goods are purchased and stored in warehouses to serve the production and business process of enterprises.
- Goods are in the unfinished production and business process of the enterprise.
- The main raw materials, auxiliary materials, tools and tools purchased to serve the production and business process of the enterprise.
Insufficient inventory includes:
- Goods sent for sale, purchased goods are on the road and goods are sent to the processing party.
- Tools, materials.
- Unfinished product.
- Finished products, goods in insufficient inventory.
Why need to handle insufficient inventory during stock count in Vietnam?
Insufficient inventory of goods in the warehouse is the work of counting both quantity and quality in order to compare insufficient inventory data on accounting books and warehouse keepers. Insufficient inventory is of particular importance, especially for the type of commercial enterprise. Therefore, insufficient inventory work plays a very important role. This job will help business owners:
- Promptly detect the difference between the actual goods in the warehouse and the accounting books, find out the cause of the difference and make a timely handling plan.
- Timely update of goods in warehouse: Defective, damaged, and deteriorating goods quality to have a plan for preservation, transportation and liquidation of goods as a basis for recording account 2294 (Reserve account for insufficient inventory price reduction) is reasonable.
- As a basis for making financial statements, the data on the financial statements more faithfully reflects the value of the enterprise’s assets, creating conditions for managers to make the right decisions for future production and business plans.
How to deal with insufficient inventory during stock count in Vietnam
When the warehouse insufficient inventory detects a shortage of goods, that is, the number recorded in the accounting books is more than the statistical figure from the warehouse keeper. The reason for insufficient inventory shortages compared to books can be due to natural losses of goods, or other causes. Therefore, when insufficient inventory detects a shortage of goods, relevant departments need to coordinate to find the cause, come up with a timely handling plan, and minimize risks in the future.
The accountant found that the number of goods was missing on the insufficient inventory record, the cause had not been clearly determined and was pending
In this case, the accountant will use account 1381 (Pending Missing Assets).
Debit A/C 1381: The value of goods is insufficient compared to the figures on the accounting books.
Cr 152, 156, 155, 153: The value of goods is missing compared to the number of recorded accounting books.
Found out the cause of the shortage of goods compared to accounting books
Depending on the cause of the shortage and the decision of the board of directors, the accountant will perform accounting in the books corresponding to the specific cases as follows:
- TH1: Missing goods due to the delivery party missing goods compared to the invoice issued => Request the supplier to hand over more missing goods.
Upon receiving the handover, the accountant recorded:
Dr 152, 153, 155, 156: Value of goods delivered by the seller
Cr 1381: The value of the missing goods has been additionally delivered by the seller
In case the supplier does not have additional goods to deliver, the seller will make an invoice to reduce the quantity of goods compared to the previous invoice. Based on the adjusted invoice, the company’s accountant recorded:
A/C 111, 112, 331…: The amount of money refunded or deducted by the seller corresponds to the amount of goods delivered in short supply
Cr 1381: Value of goods lacking VAT
Cr 1331: The VAT amount of the missing goods shall be recorded as reduced accordingly
- TH2: Shortage of goods within the range of natural loss, loss within the norm
Accounting:
Dr 632, 642, 641: Loss value in the norm
Cr 1381: Normative loss value
- TH3: The lost goods are attributed to warehouse employees, organizations and claim compensation for damages, the accountant records this case as follows:
Dr 1388: Compensation amount payable by an individual or organization
Dr 111: Compensation amount paid in cash
Dr 334: The amount of compensation by deduction from the salary of officials and employees
A/C 632: Value of insufficient inventory loss after deducting compensation revenues according to the handling decision of the management
Cr 138: Total value of goods in short supply
- TH4: If the cause of the shortage of goods in the warehouse cannot be found, the accountant records
Debit A/C 632: Increase in cost of goods sold and include in the loss of the enterprise
Yes Tk 1381
Above, Viet An tax agent has helped you recognize and have a way to handle insufficient inventory during stock count in Vietnam. Please follow our more articles to get more useful knowledge in the profession.
