STORES SUSPENSE HEADS SANJA UPRETI PAM

Stores suspense head is a Capital suspense head under demand no. 16. Why should we operate a suspense head?

The following heads are operated for recording the transactions of stores PURCHASES IMPORTED7110 INDIGENOUS7120 DGS&D7130 SALES7140 STOCK7160 SINT7170 STORES ADJ. A/C7180 MISC. ADVANCE CAP.7310

General rules for Debit and Credit Real Account Debit what comes in credit what goes out. Personal Account Debit the receiver credit the giver. Nominal Account Debit all expenses or losses, Credit all profits or gains.

PURCHASE SUSPENSE 7110,7120,7130 They are operated to account for the payment made for the procurement of all stock material. As the debits are received from the paying authority these are posted. The credits are received from the depots after the receipt of the material. At the time the advance payment is made PURCHASE SUSPENSEDr. CHEQUES & BILLS Cr. When the material has been received at the depot, receipt note is sent to the Accounts office and the following entry is made. StockDr. Purchase suspenseCr.

REVIEW OF PURCHASE SUSPENSE All items are current and those for which payments have been made and material is yet to be delivered. There are no debit payments except for those cases where advance payment ahs been done The debit/credit items may be due to the following reasons. Unlinked debit/credit, wrong mention of RO numbers, PL numbers etc. Debit balances may be due to delayed preparation of RO’s Rejection of material. PVC bills lead to less valuation in the first bill.

STOCK SUSPENSE, 7160 All the materials available I the stores depot are reflected in the stock suspense account as debit.The debits are received with contra credit to Purchase suspensefor materials procured. WMSfor material manufactured for SS Revenue Headsmaterial returned from the depots. Misc Adv. CapitalFabricated material. Deposit Misc. For stores received on loans. Stock Adj. A/Cfor adjustment in value

……….contd. The credits to stock suspense are received by contra debit to ; Sales Suspense.On sale of material WMSfor issue of material to workshops. Revenue Headsfor issue of material to divisions etc. Misc Adv. Capitalissues for fabrication Deposit Misc.Stores issued on loan. Depot transfer account What will be the normal balance under Stock Suspense? What does it reflect?

Miscellaneous Advance Capital, 7310 This head is operated whenever material is issued from the stock to outside parties for fabrication.It is thus useful in monitoring the material which has been issued to outside parties for fabrication When material is issued the entry will be MACDr. Stock AccountCr. When material is received after fabrication entry will be Stock AccountDr. MACCr. Separate budget provision is made for debit and credit.

Stock Adjustment Account, 7180 Its prime purpose is to record all variations in the book value of the stock which may occur due to revision of prices, stock verification etc. It is maintained in 3 parts. Part I Differences in Stock To be operated when the value difference is noticed between the priced ledgers and the actual physical availability of stock This head is operated after stock verification. Part II Difference in value Due to revision of rates, on account of depreciation, market fluctuations etc.

Part III Miscellaneous items. It accounts for difference between the book value and actual value realised in auctions,sales, on account of leakages, breakage, theft etc. Journal Entries The debits and credits in STA are made by contra entries in the Stock Suspense, This account is cleared every half year by affording debit/credit to the revenue heads in proportion of the issued made to the. The clearance is done with approval of the GM.

Sales Suspense Head, 7140 This is used to monitor the realisation of cash for all the material sold and account for the issues due to these sales. Normally in IR the sales are on cash basis then the flow of entries would be: cheques & bills Dr. Sales suspenseCr. When the material has been lifted then the entries would be: Sales suspenseDr. Stock suspenseCr.

Stores in transit, 7170 Materials are continuously neing transferred from one depot to another. When the stores from one depot are not received by the receiving depot then SINT is operated. Journal entry. SINTDr. StockCr. When the materials have been received at the other end and received note prepared and the same received at the store issuing depot then Transfer Div./Rlys.Dr. SINTCr.

What should be the normal balance in Purchase suspense. What does a credit entry reflect in Purchase Suspense. What does a debit entry reflect in Purchase Suspense What does a credit entry reflect in Sales Suspense. What does a debit entry reflect in Sales Suspense. What should be the normal balance in SINT suspense. What should be the normal balance in Stock suspense.

PS ADV. BILL. MATERIAL RECEIVEDD. RO PREPARED STOCK, 7160 Dr. Cr Dr. ISSUES Cr. SALES SINT RVENUE WMS MAC Dr WMS REVENUE SAA MAC DEPOT TRANSFER Cr. STORES RETURNED Dr.