Chapters 1-2 of an Accounting Research Paper
Inventory and Waste Management System For A Gas Retail Fueling Station
A thesis proposal submitted to the
College of Accountancy
In partial fulfillment for the requirement of the course in Internship/Accounting Thesis
INTRODUCTION
Any stock that a firm keeps to meet its future requirement of production and sales is called “INVENTORY”. The basic reason for holding inventory is to keep up to the production activities unhampered. It is neither physically possible nor economically justifiable to wait for the stock to arrive at the time when they are actually required. Therefore, keeping of inventory is a must for the efficient working of a business unit.
Finished goods are completed goods awaiting sale in a manufacturing concern; they are the final output of the production process. The nature of inventory depends upon the type of activity carried on. In the case of a trading concern, it will comprise only finished goods or stock-in-trade owned by it for sale to customers in the normal course of business. Inventory needs proper control as it is one of the largest assets of a business. Inventories should neither be excessive nor inadequate. If inventories are kept at a high level, higher interest and storage costs would be incurred; on the other hand, a low level of inventories may result in frequent interruption in the production schedule resulting in under utilization of capacity and lower sales. Some businesses have another concern for their inventory. Spoilage, evaporation and other kind of inventory losses are incurred depending on the type of products offered. All businesses strived to prevent these losses but are also prepared to account for them. They have established procedures and standards to accurately determine and measure the appropriate amount of losses incurred. These losses are considered as waste. Proper measurement of inventory, especially those that have the tendency for normal loss, is vital to a good inventory management.
A thesis proposal submitted to the
College of Accountancy
In partial fulfillment for the requirement of the course in Internship/Accounting Thesis
INTRODUCTION
Any stock that a firm keeps to meet its future requirement of production and sales is called “INVENTORY”. The basic reason for holding inventory is to keep up to the production activities unhampered. It is neither physically possible nor economically justifiable to wait for the stock to arrive at the time when they are actually required. Therefore, keeping of inventory is a must for the efficient working of a business unit.
Finished goods are completed goods awaiting sale in a manufacturing concern; they are the final output of the production process. The nature of inventory depends upon the type of activity carried on. In the case of a trading concern, it will comprise only finished goods or stock-in-trade owned by it for sale to customers in the normal course of business. Inventory needs proper control as it is one of the largest assets of a business. Inventories should neither be excessive nor inadequate. If inventories are kept at a high level, higher interest and storage costs would be incurred; on the other hand, a low level of inventories may result in frequent interruption in the production schedule resulting in under utilization of capacity and lower sales. Some businesses have another concern for their inventory. Spoilage, evaporation and other kind of inventory losses are incurred depending on the type of products offered. All businesses strived to prevent these losses but are also prepared to account for them. They have established procedures and standards to accurately determine and measure the appropriate amount of losses incurred. These losses are considered as waste. Proper measurement of inventory, especially those that have the tendency for normal loss, is vital to a good inventory management.