Goods Purchased for Resale

When goods are purchased from a vendor for resale to users, the invoice prices of the items along with any costs pertaining to the procurement and receipt of the items for resale should be recorded as merchandising inventory (FAS inventory account control 1530-1559) in the general ledger (Ledger 0).

Upon the sale of an item to a user, the cost of the item and its related costs, are transferred from the inventory account to the recharge operation Ledger 2 account using a cost of goods sold subaccount in the 0991-0998 range.

A physical count of the inventories must be taken each fiscal year end and reconciled to the balance in the Ledger 0 inventory account. A representative from the Comptroller's Office should observe the count. The general ledger account control, which records the book value of the inventory at the time of the physical count, should be adjusted to reflect the value of the actual count in the case of discrepancies. (See Appendix F-1, Recharge Operation Merchandising Inventory Accounting Protocol, for more further information.)

Goods Manufactured for Resale

When goods are manufactured for resale, the invoice prices of the raw materials along with any costs pertaining to the procurement and receipt of the materials should be recorded as manufacturing inventory (FAS inventory account controls 1500-1529) in the general ledger (Ledger 0).

Upon the sale of a finished item to a user, the cost of the components and any related costs, are transferred from the inventory account to the recharge operation Ledger 2 account using a cost of goods sold subaccount in the 0991 through 0998 range.

A physical count of the inventories must be taken each fiscal year end and reconciled to the balance in the Ledger 0 inventory account. A representative from the Comptroller's Office should observe the count. The general ledger account control, which records the book value of the inventory at the time of the physical count, should be adjusted to reflect the value of the actual count in the case of discrepancies. (See Appendix F-1, Recharge Operation Merchandising Inventory Accounting Protocol, for more further information.)