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Now, stock movement can apply for stock that you buy or raw materials that you buy. In
this example, the accounts that I'm going to be using will all have the name Stock but
they can be raw materials if you deal with raw materials, so it’s simply just a naming
of the particular accounts. So, if you follow this example, it will work for raw materials
but I’m going to be talking about stock bought and stock sold in this example.
OK, so there are 2 ways of handling stock purchases in Business Accountz. Method 1;
you buy stock and hold it as an asset in Stock Bought Not Sold (which is just here), if it's
not here you can set these up, check out the video on setting up accounts for any accounts
if you don’t have them. OK, so this would be a Red Book entry, and
it will come from the Bank or Bills Unpaid account and it would go to Stock Bought Not
Sold account. Then at the end of the week, month or year, you can manually calculate
the value of the remaining stock and enter a Green book transfer From Stock Bought Not
Sold and To Stock Sold at Cost. OK, so lets’ go ahead and give you an example
of this. So the first transaction is a Red Book transaction. I’m going to go ahead
and enter a new line, so it's going to put it there at the bottom, I’m going to say
it’s from the start of this year. I’m going to go straight over to the From and
To accounts, all of the remaining fields are sort of optional, specify the fields needed.
It's going to come From the Bank (that's where I bought the stock) and it's going to go To
Stock Bought Not Sold. And it was going to be Standard VAT and £1000 was the figure
for this example so it's £1200 for the stock that we've bought.
OK, so lets’ go over and have a look at the Gold Coins. So here you can see the actual
value after the VAT is £1000 and the rest of it has gone to the VAT. OK, so lets’
go and do our stock check and we'll go and enter that entry.
So, we're going to add a new line now, and lets’ say we did this on the 1st of June.
OK, so lets’ say 50% of the stock is gone, so now it's going to go From Stock Bought
Not Sold and it's going to go To Stock Sold At Cost, lets’ say £500, job done. So if
we now go back to the Gold Coins once more, you can see that the stock value has gone
down by £500 and the Stock Sold At Cost is also showing you your cost of sales.
OK, so that's method 1, now method 2 you can also do it straight to the cost of sale. So
you can buy stock and post it straight to the cost of sale account. This would be a
Red Book entry and it will come From the Bank or Bills Unpaid and it will go straight To
the Stock Sold at Cost account. OK, and then once you do your stock count; weekly, monthly
or yearly, it will be From the Stock Sold At Cost and To the Stock Bought Not Sold.
OK, so lets’ give you that example as well, I'm going to delete these entries so you can
see what it looks like. So I need to go and find the entry here. First, delete it and
lets’ go to the Green and delete that.
OK, right so lets’ go ahead and do our Red Book entry, so lets’ add another line here.
Again we'll say it was the start of the year, so this time we're going to post it straight
to the Cost of Sale. So we're going to go From the Bank or Bills Unpaid (if it's outstanding),
To the Stock Sold at Cost. And we're going to say again, lets’ say £1200 with Standard
VAT. OK, so lets’ go and have a look at the outcome. So here we can see that our Stock
Bought Not Sold has not been affected, the Stock Sold at Cost has gone straight to 1000
and the Bank has been reduced. OK, so lets’ go over to the Green Book and
do our little stock check. So we're going to add the new line here. OK, so we're going
to select June and we're going to come From the Stock Sold at Cost account and it's going
to go To the Stock Bought Not Sold account, 500. And lets’ go ahead and take a check.
So here you can see that again, 50% of the stock now is in our assets here, and your
COGS account has also been updated. OK, so that should show you how you can do
Stock Bought and Stock Sold transactions for stock movement. Again, it applies both for
raw materials that you buy or also just general stock like what I've done here.
OK, once you have entered the Green Book transaction, you'll be able to see the effect in the Profit
& Loss report, that your profit has been reduced. So the Green Book transactions would show
you in your P&L that your profit has been reduced after you've done the Green Book transactions.
OK, so that should conclude this video.