“Transfer” card and “receiver” card

The accounting entry accompanying the concentration operation

Examples:

1. Transfer balances from the cards: Wood, Glue, and Nails, to the card: Raw Materials.

   Raw materials card
   Details		duty	right	balance
   Deal details	H-N against me
   Balance transfer	Trees	1,000		H 1,000
   Balance transfer	paste	400		H 1,400
   Balance transfer	Nails	100		H 1,500

2. Transfer balances from the cards: (Sales of) Chairs, (Sales of) Tables, (Sales of) Cabinets, to the card: Sales.

   Sales card
   Details		duty	right	balance
   Deal details	H-N against me
   Balance transfer	Chairs		600	600
   Balance transfer	Tables		1,000	1,600
   Balance transfer	Cabinets		3,000	4,600

Registration on cards

We will follow the two cards: Wood and Raw Materials (in example 1 above).

The Timber card has a debit balance (1,000 NIS), which means that the card received merchandise, and it is supposedly supposed to return it (or its monetary value). The action of transferring the balance is considered to be transferring the value of the merchandise from the Timber card to the Raw Materials card, and it is the one who is (supposedly) supposed to return the merchandise or pay for it.  

And in conclusion: a timber card gives goods and is credited, and a raw materials card receives (so to speak) goods and is debited.

We will track both tickets: Table Sales, and Sales (in example 2 above).

The (sale) table card is in a credit balance (1,000 NIS), which means that the card gave away goods, and is supposedly supposed to receive them back (or its money’s worth).

The balance transfer operation is based on the assumption of receiving the value of the goods from a sales ticket, and it is the one that is supposed to (supposedly) receive the goods or receive their equivalent. In conclusion: a table sales ticket receives the value of the goods and is debited, and a sales ticket gives the value of the goods and is credited.

Adjustments

It is important to note that all accounting activities are accompanied by physical checks that include: bank reconciliations, inventory counts, and sample checks of other items. These checks are done once a period and are called: reconciliations .  

For example: if, according to the accounting records, there should be 1,000 NIS in the bank’s cash register, we check that there is indeed 1,000 NIS in the cash register, if, according to the accounting records, there is inventory worth 5,000 NIS, we check that there is indeed inventory worth 5,000 NIS in the warehouse, and so on.