Accounting Equation

Assets are the valuable resources owned by a business . For financial the valuable resources are required . The the value of re sours and sours must be equal . The expression of the equality in the term of equation is known as accounting equation . An accounting equation is expressed as below :
                                                       Resource = source of finance
Resource denotes assets . capital & liabilities are included in the sours of finance .so the  above equation can be expressed in the following ways too :
                                                   Assets = capital + liabilities
                                                   capital = assets - liabilities
                                                   Liabilities = Assets - capitals
Accounting equation is also known as balance sheet equation . Assets ,liabilities and capitals are three basic element of every business transaction . 

Materials purchasing and receiving procedure (Accounting for materials nad stores )

There are a number of procedures involving in purchasing and receiving of materials . The following steps are followed :
A. purchase requisition .
B. Call for tender or quotation .
C. Purchase order .
D. Receiving and inspecting materials .
E. checking and passing of bills for payment . 

Purchase requisition (Accounting for materials nad stores )

A purchase requisition is a formal request for materials to purchasing department , received either from store or production department . On the basis of this purchase reqiusition , the purchasing department purchases materials and supplies for various department .For this , printed forms are used and prepared in triplicate . The first original copy is sent to purchasing materials .

centralizad purchasing (Accounting for materials nad stores )

centralized purchasing means the purchase of materials by a specialized with expert ataffs located at one place . Under this , the purchasing department purchases all the materials for various department and branchese of the organization . This purchasing department is handled nad controlled by a purchase manager or chief buyer .
                            Advanteges of centralized purchasing :
1. Bulk quantity of materials can be purchase at cheaper rate and at a good trade discount .
2. Quantity of materials can be maintained at it purchased by specialized and experience personnel .
3. better handling of store is possible .
4. Better co- ordination and co operation with other department .
5.recording and accounting of materials are easy and economical .
6. Effaective cotrol over materials can be possible .
7. facilitate planning and monitoring timely in delivery of goods .

                                Disadvantege of centralized purchasing :
It involves high initial cost to establish a purchasing department .
1. There may by delay ingetting materials from centralized store to verious department .
2. It is not suitable to those organizetion having branches at different geographycal location .
3. It creates a problem in case of emergency situation .
4. It take time to replace the defective materials .

purchase control (Accounting for materials and stores )

A huge amount of money is invested in purchasing materials by the organization . So it is importance to give due consideration in materials purchasing . Purchase control refers to the purchase of materials of right quality in right quantity at right price in right time form the right sources of suppliers . Purchase control avoids :
1. unnecessary purchase of materials .
2. Over - stoking of materials by unnecessary purchase.
3. Purchase at unreasonable price .
4. delay in delivery of materials .
5.Purchase of inferior quality of materials.
                                                 
                                                             For effective purchase control , the function of purchasing department should be classified and authority should be delegated to persons so that the  accountability can be established .     

Purchasing (Accounting for materials and stores )

Purchasing of materials is one of the important function of materials management and control because it affects the quality of product and involves a major portion of company 's finance purchasing means procuring of materials of right quality and quantity at a right price from the right sources of suppliers at a right time . Therefore a separate purchase department is established to perform these functions .   

store routing (Accounting for materials and stores )

store routing refers to the procedures applied in purchasing material, storing them and issuing to the concerned department . Store routing includes : 
1. purchasing and receiving of materials / materials purchasing and receiving procedure .
2. Storing of materials / store keeping procedure .
3. Issuing of materials / materials issuing procedure .