Receiving Materials
Receiving Materials:
The function of the receiving department is to: unload and unpack incoming materials; check quantities received against the shippers packing list; identify goods received with descriptions on the purchase order; prepare a receiving report; notify the purchasing department of descriptions discovered; arrange for inspection when necessary; notify the traffic department and the purchasing department of any damage in transit; and rout accepted materials to the appropriate factory location.
The receiving report shows the purchase order number, the account number to be charged, the name of the vendor, details relating to transportation, and the quantity and type of the goods receive. The form also provides a space for the inspection department to note either the complete approval of the shipment or the quantity rejected and the reason for the rejection, in inspection does not take place immediately after receipt of the materials, the receiving report is distributed as follows:
- The receiving department keeps one copy and sends another copy to the purchasing department as notice of the arrival of the materials
- All other copies go to the inspection department, and are distributed when inspection is completed. After inspection, one copy of the receiving report, with the inspection result noted thereon, is sent to the accounting department, where it is matched with the purchase order and the venders invoice and the paid. Other copies go to various departments such as materials and production planning. One copy accompanies the materials, so that the storekeeper knows the quantity and the kind of materials received.
You may also be interested in other useful articles from “controlling and costing materials” chapter:
- Purchases of productive material
- Purchases of supplies, services, and repairs
- Materials purchasing forms
- Receiving materials
- Invoice approval and data processing
- Correcting invoices
- Electronic data processing (EDP) for materials received and issued
- Cost of acquiring materials
- Storage and use of materials
- Issuing and costing materials into production
- Materials ledger card – perpetual inventory
- First-in-First-Out (FIFO) Costing Method
- Average Costing Method
- Last-in-First-Out (LIFO) Costing Method
- Other Methods-Month end average cost, last purchase price or market price at date of issue, and standard cost
- Inventory valuation at cost or market whichever is lower
- American Institute of Certified Public Accountant (AICPA) cost or market rules
- Adjustments for departures from the costing method used
- Inventory pricing and interim financial reporting
- Transfer of materials cost to finished production
- Physical inventory
- Adjusting Materials Ledger Cards and Accounts to Conform to Inventory Accounts
- Scrap and waste
- Spoiled goods
- Defective work
- Discussion Questions and Answers about Controlling and Costing Materials
Other Related Accounting Articles:
- Materials Ledger Card–Perpetual Inventory
- Invoice Approval and Data Processing
- Purchase of Productive Materials
- Materials Purchasing Forms
- Storage and Use of Materials
- Transfer of Materials Cost to Finished Production–Inventory Valuation
- Purchase of Supplies, Services, and Repairs
- Correcting Invoices
- Physical Inventory – Inventory Valuation
- Electronic Data Processing System (EDP System) for Materials Received and Issued
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