Inventory Accounts 14XX

[Carl B]

Hi, Im losing mind sifting through the countless questions about inventory and which accounts to use. Hoping someone can clear this up for me or at-least point me in the right direction. 

Heres my background, Limited Company, Cash Basis. Buying & Selling collectible items. So far only buying and importing items from outside the EU, As im too scared to tackle the VMB accounting.

Currently im booking all purchases in accounts 4045. My question is Inventory, what is account 1460 'Goods for resale' used for and how? Should i be logging all my purchases i plan on reselling in this account rather than 4045 as they are all goods for resale? Then i make sales how do i book correctly to lower my inventory account? 

Any help is greatly appreciated! 

[Joachim E]

Hi

At least once a year you need to Count/calculate what inventory you have left and do a posting of the value you have in inventory at the end of the year.

The value of what's left needs to be entered into your bookkeeping throgh a manual posting. 

1460 is used to record the asset you have as inventory at the end of the year and in the same post you reduce the financial years cost for what has been bought but not sold yet.

So when you have done a calculation of your inventory and got a value/Sum you do this posting on the last day of the financial year.

1460 Debet 
4990 Kredit

Have in mind that you need to create a document of your inventory as well (What goods you have left)

/Joachim

[Carl B]

Thankyou very much for the simple but straight forward response! 

One more quick question, all inventory is calculated into the same 1460 account? Simplified VMB, Normal VMB and VAT Purchases?  

[Joachim E · Accepted solution]

Hi

Well yes but remember to use the net amount får the goods purchased with normal VAT.

Joachim

[Carl B]

THANKYOU! 🙂