Accounting Treatment: The Cost Valuation Method Is Actually Chosen.

At present, relatively mature inventory management software in the market often provides only a kind of cost carrying method, the mobile weighted average method. For this management mode, the general purchase and sale enterprises can still be used, but if the enterprises are very sensitive to the cost of purchase or require higher cost accounting, such software will be inadequate.

When the inventory is issued, the cost should be carried forward. There are many valuation methods in the accounting cost. The different valuation methods have a significant impact on the profit and loss, the balance sheet and even the amount of tax. Therefore, we must strengthen the theoretical research of the cost valuation method in order to provide a perfect inventory management solution before designing software for inventory management.

When issuing inventory, it is necessary to determine the cost of issuing inventory according to a certain pricing method, so that the cost of issuing inventory and the cost of ending inventory can be as close to the purchase cost of inventory as possible, so that the impact of different cost valuation methods on the profit of enterprises will become the lowest, and the impact on the normal operation of enterprises can be reduced as little as possible.

Generally speaking, there are two kinds of valuation methods when the inventory is issued: the actual cost method and the planned cost method.

The former includes five kinds of valuation methods, namely FIFO, last in first out, weighted average, mobile weighted average and individual valuation. The latter includes planning cost method, gross margin method and retail price method.

Before designing inventory management software, software engineers must take into consideration the management characteristics of these cost carrying methods and the advantages of computer management.

Generally speaking, these methods should be provided in software design. When users are using software, they should choose the cost carry over valuation method suitable for their own use.

Now the relatively mature inventory management software in the market often provides only a kind of cost carrying method -- the moving weighted average method, that is, an average price.

For this kind of management mode, the general Invoicing enterprises can still be used, but if the enterprises are quite sensitive to the cost of purchase or the enterprises with higher cost accounting requirements, such software will be inadequate.

For example, cost management, widely prevalent in modern enterprise management, is extremely sensitive to cost.

For example, in the hospital, the warehouse storage department must accurately measure the inventory costs of various medical departments, so we must adopt another method of cost valuation, the individual valuation method.

The main method of comparison is that since users have such a variety of needs, before developing software, we must carefully study and have a good understanding of accounting, so that the software developed will have both functional integrity and full adaptability, while some software developers often only understand the fur of inventory management, so as to rush to work, discover problems and overturn them again, resulting in the development cost increasing again and again.

This paper introduces the commonly used method of cost pfer, for reference.

1. first in first out method: first in first out method is first purchased stock first shipment, its cost is physical cost, computer processing cost price should be automatically analyzed by the computer, its unit cost price should not be modified, the user only input the quantity of the shipment, not enter the cost unit price, the computer automatic analysis to get the cost unit price.

For this reason, the computer must record the purchase quantity and cost in chronological order.

The shipping cost of the method is determined by the earliest purchase price, and the user can not pick the stock price at random to affect the current profit. Therefore, the cost of inventory is closest to the prevailing market price and can reflect the value of the balance sheet inventory better.

2. last in first out method:

After purchase, the inventory is shipped first. As with the FIFO method, its cost should be automatically obtained by computer analysis, and its unit cost price should not be modified.

For this reason, the computer must record the purchase quantity and cost in chronological order. When the shipment is delivered, the user will input the quantity of the shipment and not enter the cost unit price, and the computer will analyze the cost in the reverse order of the FIFO and the first in first out method.

The shipping cost of the method is determined by the latest purchase price, and the user can not choose the inventory valuation at will to affect the current profit.

Since later prices may be higher than normal in normal circumstances, the cost of valuation may be higher, so the profit of this period can be reduced, but this method also accords with the conservatism principle of accounting.

3. individual valuation method: individual valuation method carries out individual valuation on the cost of shipment, suitable for enterprises that are more sensitive to cost, such as large hospitals, and after purchasing inventory, the inventory department should be led by various departments. Under the condition of more strict cost accounting, the cost of each sector is directly linked to the benefit bonus. At this time, the cost must be individually priced, that is, the market price of the products required by the Department must be priced.

In computer processing, users must be able to input quantity and input cost unit price.

This method is closest to the principle of accounting based on cost, but it is relatively complicated. Even with computers, the workload may be relatively large, and it is suitable for general non interchangeability.

Or products that are easy to identify, few in stock and high in unit prices.

4. weighted average method: it is a weighted average method of whole month. It calculates the weighted average price of the whole month at the end of the month on the basis of the initial inventory balance and the quantity and cost of the current income inventory, so as to obtain the cost of inventory and the cost of inventory in the current period.

This method has to go to the end of the month to get the cost price, which is contrary to the management characteristics that the computer can get immediately, so it does not adopt the necessity of its management.

5. mobile weighted average method: because of its simplicity, this method is a commonly used method in computer software design. When designing software inventory management procedures, software engineers may not know the accounting name of this management method, but all adopt the management thinking of this method.

According to this method, when entering the warehouse, the computer increases the stock and stock of the stock, and the stock in the warehouse is divided into the unit cost.

This method is a very cumbersome method under manual management, but it is the simplest way to program design under computer management, so most software

This method is used as the main method of inventory management.

6. plan cost method: this method is measured according to the planned cost, and the unit planned cost of the product is set on each product, and the cost is automatically obtained by the computer when the library is out.

The establishment of planned cost under planned cost method needs considerable maneuverability. It must be established on the basis of sufficient investigation and study to make it feasible and feasible. However, the established inventory planning cost tends to be more and more operational as time goes by, so it is seldom seen in inventory management and actual management.

7. gross margin method and retail price law: gross margin method is based on the current sales net times the actual gross profit margin at the early stage to calculate the gross profit in the current period and calculate the cost of issuing inventory.

This method calculates the gross profit margin of the previous period by the computer, and then calculates the shipping cost, and the user only needs to input the quantity.

The retail price method is a method of calculating the cost of ending inventory with the percentage of cost accounting for retail price.

This method is the same as the weighted average method. It is a management method that is calculated by the end of the month and is not suitable for processing with computers.

For the above methods of inventory cost, software designers and software users should fully understand that it is not easy to change the cost carry over method carefully, once it is determined, this change is often not only a change of management mode, but also the risk of computer processing confusion caused by the change of cost carrying method.