Difference Between Bin Card and Stores Ledger with Comparison Chart

The two commonly used methods in stores ledger are First In, First Out (FIFO) and Last In, First Out (LIFO). The selection of a suitable method affects the financial statements and tax liabilities of the company. While stores ledger FIFO method leads to a higher reported income during periods of rising prices, LIFO results difference between bin card and stores ledger in lower income and tax liabilities.

In conclusion, the bin card and the stores ledger play vital roles in inventory management, yet they serve distinct functions. The bin card provides a detailed record of individual item quantities, transactions, and balances, primarily managed by the storekeeper within storage facilities. Conversely, the stores ledger offers a comprehensive overview of all inventory, recording transactions centrally by the company’s cost accounting division.

In contrast to the bin card, which concentrates on specific items, the store ledger includes all of the inventory. Usually, the store manager or someone in charge of inventory control maintains it centrally. A more detailed overview of inventory movements and levels is given by the store’s ledger, which facilitates decision-making and overall inventory management. In summary, the store ledger gives a comprehensive picture of the store’s total inventory, whereas the bin card gives specific information on each item’s stock level. Bin cards are usually accessible within the specific storage location they represent.

Benefits of Bin Cards and Store Ledgers

The items listed in the Store Ledger are – cost of items, items received, items issued, minimum stock, and maximum stock. Bin Cards are commonly used by retailing businesses with large stock rooms to keep track of their stock levels. Only the quantity of materials, based on receipts, issues, and balances is recorded. Businesses can use the maximum and minimum columns to determine whether more inventory items are needed or not based on the level of stock available.

Benefits of a Store Ledger

It is possible to prepare financial profit and loss accounts from Store Ledgers by using closing stock values. Every Bin Card, whether it is electronic or paper, is updated constantly within the perpetual inventory systems. Bin Card is kept attached to the bins inside the store as to enable to identify the stock. Stores are the money every company stores to plan its future sale of goods.

But the bin card does not normally contain the detailed information of materials reserved and ordered and is only a record of actual material movements. The storekeeper maintains the bin card, whereas the cost accountant maintains the store ledger. Bin Cards is record of stock movement ie receipts, issues, and Stores Ledgers is record of inventory. Bin Cards are updated immediately after each transaction, and Store Ledger is updated periodically. Storekeeper maintains the Bin Card, and Costing Department maintains the Stores Ledger.

They can help businesses keep track of what inventory they have on hand, and where that inventory is located. Bin cards can also help businesses track the movement of inventory and identify trends over time. The use of Bin Cards can help improve waste management by keeping accurate records of what is being discarded. It is possible to use them to evaluate the efficiency of different waste collection services as well. Stores Ledger – It alludes to a subsidiary ledger that keeps track of each and every transaction relating to materials in the stores. Considering this statement highlight the uses and values of store ledgers.

Limitations of Cost Accounting

And to do so, entries are made in respective columns for various transactions. Recording of additional information for quantity on order and reserved can also be done. Perpetual and Periodic Inventory System are two systems that record the movement of stock maintained by the stores department.

1. A Bin Card contains information regarding the status of goods located in a stock room.
2. Business owners can use them to decide whether they need to buy additional stock materials.
3. Here, the COGS is decided by the most recent inventory costs, and the ending inventory is valued at older, lower costs, different from the current market prices.
4. Bin Cards is record of stock movement ie receipts, issues, and Stores Ledgers is record of inventory.
5. Materials are taken to or provided by retailers once the transaction is completed, and the record is made in the bin card.
6. Bin card is used to quantitatively record the items received, issued and remained in the stores.
7. The selection of a suitable method affects the financial statements and tax liabilities of the company.

1. While often used interchangeably, these documents serve distinct purposes in the management of inventory.
2. Store ledgers, on the other hand, offer a comprehensive record of stock-related transactions across the entire store or warehouse.
3. It comprises of Bin Card and Stores Ledger, to keep track of various items.
4. Interdepartmental transactions are recorded for costing purposes in the Store Ledger.
5. Bin cards can also help businesses track the movement of inventory and identify trends over time.
6. Electronic Bin Cards allow you to monitor large quantities of stock even more efficiently.

It involves handwritten entries, while computerized systems utilize software to record and manage inventory data efficiently. The FIFO method emphasizes considering the oldest inventory items first for selling or production. The cost of goods sold (COGS) is based on the costs of the earliest acquired inventory. Also, the ending inventory is valued at the most recent costs, reflecting current market prices. However, LIFO focuses on using the most recently acquired items first for sale or production activities.

Management Accounting MCQs 2024 Multiple Choice Questions and Answers 2024

In cost accounting, bin card is used to mean a document that keeps a record of the items held in stores. Bin implies a container or space to keep materials, and with each bin, a card is placed, that comprises of details of material received, issued and returned. Moreover, it contains details relating to the number of items, their description and relevant notes (if any). A Stores Ledger refers to a manual or computerized recording of the items in a firm’s store or warehouse to track their quantity, value, date of purchase, and sale or movement. It facilitates efficient inventory control and management and ensures accurate financial reporting.