A Step by Step Approach to Maintain Inventory Records
using MYOB AccountRight Plus v19
Copyright Notice:
Copyright ©2011 Software Publications Pty Ltd. All rights reserved.
No part of this material may be reproduced or copied in any form or by any means (graphic, electronic or
mechanical, including photocopying or by information retrieval systems) without permission in writing
from Software Publications Pty Ltd
Written by:
Marian Brown Dip T [Commerce], MICB
MBS Training Services Pty Ltd
BAS Agent
Cert IV Training and Assessment, Cert IV in Financial Services [Bookkeeping]
MYOB Certified Consultant for 16 years
MYOB Accredited Author, MYOB Accredited Trainer, ABN Tax Client Manager
Publishers:
Software Publications Pty Ltd [ABN 75078026150]
Head Office – Sydney
Unit 10, 171 Gibbes Street
Chatswood NSW 2067
Phone:
Web address:
1 800 146 542
www.softwarepublications.com.au
FNSACC405A Maintain inventory records
ISBN: 978-1-921885-50-1
1 June 2011
© Software Publications Pty Ltd 2011
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19 – Table of Contents
i
Copyright/Trademark Information:
MYOB®, MYOB AccountEdge®, MYOB AccountRight Standard™, MYOB AccountRight Plus™, MYOB
BusinessBasics™, MYOB FirstEdge®, MYOB M-Powered®, MYOB M-Powered Services™, MYOB M-Powered
Bank Statements™, MYOB M-Powered Invoices™, MYOB M-Powered Payments™, MYOB ODBC Direct™, MYOB
PowerPay®, MYOB AccountRight Premier® and MYOB AccountRight Enterprise® and MYOB AssetManager Pro,
are registered trademarks or trademarks of MYOB Technology Pty Ltd and their use is prohibited without prior consent.
Ceedata, Solution 6 MAS and Xlon are registered trademarks or trademarks of Solution 6 Holdings Limited, a member
of the MYOB group.
Bpay® is a registered trademark of Bpay Pty Ltd, ABN 69 079 137 518.
MasterCard® is a registered trademark of MasterCard International Inc.
Microsoft, Access, Excel, Internet Explorer, Office, Outlook, Smart Tags, Windows and Word are registered
trademarks or trademarks of Microsoft Corporation in the United States or other countries.
VISA® is a registered trademark of Visa International Service Association.
Other products mentioned may be service marks, trademarks or registered trademarks of their respective owners.
Screen captures from MYOB AccountRight Plus v19 reproduced with permission.
Limitations of Liability:
This material is designed to provide basic information on how to use MYOB AccountRight Standard/AccountRight
Plus v19. Because business circumstances can vary greatly, the material is not designed to provide specific GST or
business advice for particular circumstances. Also, because aspects of the GST are complex and detailed, the material is
not designed to comprehensively cover all aspects of the GST. Further, the laws implementing GST and rulings and
decisions under those laws may change.
Before you rely on this material for any important matter for your business, you should make your own enquiries about
whether the material is relevant and still current, and whether it deals accurately and completely with that particular
matter; and as appropriate, seek your own professional advice relevant to that particular matter.
This information is for the general information of MYOB clients and is not to be taken as a substitute for specific
advice. Consequently Software Publications Pty Ltd and Marian Brown will accept no responsibility to any person who
acts on information herein without consultation with Software Publications Pty Ltd.
Please note:
The information in this workbook is accurate at the time of revision [June 2011] only. Because legislation and
associated websites are constantly changing, url’s and screen dumps of websites in this workbook may have changed.
ii
Table of Contents – A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19
© Software Publications Pty Ltd 2011
Unit 6:
Using Periodic
[Physical] Inventory
using AccountRight
In this Unit you will:

Create an item card using periodic inventory

Enter a purchase using periodic inventory

Enter sale using periodic inventory

Enter an adjustment using period inventory

Enter a journal entry for stocktake figures

Print reports

Inventory Turnover Ratio
© Software Publications Pty Ltd 2011
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19 Unit 6 Periodic Inventory
123
 Setting up Accounts for Item Cards for Periodic Inventory
Accounts NOW also buys and sells Mouse Pads, however many are given away as gifts. Therefore,
Accounts NOW does not wish to inventory Mouse Pads ie track numbers and values on hand.
(i)
Open the data file used in Unit 5.
(ii)
Add the following accounts to your Accounts List.
1-4500
4-6000
5-6000
5-6100
5-6200
(iii)
Stock on Hand – Mouse Pads
Sales – Mouse Pads
Opening Stock – Mouse Pads
Purchases – Mouse Pads
Closing Stock – Mouse Pads
N-T
GST
N-T
GST
N-T
Value of Mouse Pads on hand 1/month you are using: $100 ex GST.
To record the opening balance of Mouse Pads on hand, enter the following
Journal entry. [Accounts, Record Journal Entry]
(iv)
Create an Item Card for Mouse Pads like this:
I Buy, I Sell only.
124
Unit 6 Periodic Inventory
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19
© Software Publications Pty Ltd 2011
(v)
Enter the purchase of 50 Mouse Pads like this.
(vi)
Enter the sale of 5 Mouse Pads like this.
© Software Publications Pty Ltd 2011
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19 Unit 6 Periodic Inventory
125
(vii)
Enter the value of Mouse Pads given to clients as gifts using a Journal Entry.
(viii) Enter the value of Mouse Pad on hand end/financial year [$275 ex GST] using
a Journal Entry. [A physical stocktake was taken.]
(ix)
126
Unit 6 Periodic Inventory
Enter the following Journal to transfer the opening stock to cost of sales.
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19
© Software Publications Pty Ltd 2011
(x)
View your Profit and Loss for the year
Sale of Mouse Pads:
$50.00
Cost of Sales of Mouse Pads:
[100 + 200 – 275]
Profit from selling Mouse Pads:
(xi)
$25.00
$25.00
In the Balance Sheet, view Stock on Hand – Mouse Pads [30/6/xx]
$275.00
Consider the differences between Periodic and Perpetual Inventory.
© Software Publications Pty Ltd 2011
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19 Unit 6 Periodic Inventory
127
 Notes on Inventory Turnover Ratio [or Stock Turnover Ratio]
Accounts NOW has to maintain a certain level of inventory so as to be able to meet the requirements
of the business. But the level of inventory should neither be too high nor too low. Accounts NOW
uses “Minimum stock on hand” and the “Stock Alert” report to monitor stock levels.
A too high inventory means higher carrying costs and higher risk of stocks becoming obsolete
whereas too low inventory may mean the loss of business opportunities. It is essential to keep
sufficient stock in business.
Inventory turnover ratio is a relationship between the cost of goods sold during a particular period
of time and the cost of average inventory during a particular period. It is expressed in number of
times. Inventory turnover ratio indicates the number of times the stock has been turned over during
the period and evaluates the efficiency with which a firm is able to manage its inventory. This ratio
indicates whether investment in stock is within proper limit or not.
Average inventory and cost of goods sold are the two elements of this ratio.
Average inventory is calculated by:

adding the stock in the beginning [eg 1/7/xx] and at the aed of the period [eg 30/6/xx] and
dividing it by two.
Cost of Goods Sold:

In this workbook, you have calculated “Cost of Goods Sold” using Perpetual Inventory and
valuing stock using the weighted average method. You also calculated “Cost of Goods
Sold” using Periodic Inventory and valuing stock using the F.I.F.O method.
Example:
The cost of goods sold is $500,000. The opening stock is $40,000 and the closing stock is $60,000
(at cost).
Calculate inventory turnover ratio
Inventory Turnover Ratio = 500,000 / 50,000*
= 10 times
*($40,000 + $60,000) / 2
= $50,000
Significance of Inventory Turnover:
Usually a high inventory turnover indicates efficient management of inventory because more
frequently the stocks are sold; the lesser amount of money is required to finance the inventory.
A low inventory turnover ratio indicates an inefficient management of inventory. A low inventory
turnover implies over-investment in inventories, dull business, poor quality of goods, stock
accumulation, accumulation of obsolete and slow moving goods and low profits as compared to
total investment.
You have completed Unit 6. Turn to unit 7 to test your skills.
128
Unit 6 Periodic Inventory
A Step by Step Approach to Maintain Inventory Records using MYOB AccountRight v19
© Software Publications Pty Ltd 2011