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If your company require to keep track of inventory, then one of the things you require to do in setting up of the Document (company file) in MoneyWorks accounting software is updating of the closing stock as of your cutoff date (cutoff date refers to the date you cutoff from the existing accounting software, it could be your year end closing date).
From the “Setting up” navigation page of the MoneyWorks accounting software, step 6 “Enter Items” will bring you to the Items list to create your products. You should consider entering the average unit cost (or the unit cost which you derived your stock value on hand as of your cutoff date) into the “Buy Price” field from the Buying Info tab of the product profile. MoneyWorks will be using the “Buy Price” to multiply by the stock count to derive the stock value of the item. You should also check the checkbox for “Update price whenever purchased” so upon next purchase, MoneyWorks will update the latest buying price into the “Buy Price” field.
When you are ready to record the closing stock quantity, you click on the “Enter Stocktake” button, step 7 of the Setting Up navigation page, to get into the stocktake page.
In the stocktake page, click the “Start Stocktake” button and start recording the stock counts. You enter the closing stock quantity into the Counted column.
Once you have entered the stock counts, you go to the Edit menu and select the “Select All” function to highlight all the items in the Stocktake list, and follow by clicking the Finish Stocktake button to commit the stocktake.
In the Commit Stocktake window, the Date will be your cutoff date and Stock Adjustment account will be the SETUP account. Lastly, click on the Commit button to commit your changes.
A “Create Journal” will be posted automatically in MoneyWorks to update your stock quantity and value on hand.
The double entry for this journal transaction will be :
Debit Stock On Hand account (Inventory asset)
Credit Setup account
The Setup account is a temporary account, which will be zeroed once all the closing balances as of your cutoff date of the Balance Sheet accounts is entered.