Costing and Taxation · Ch 5 — Cost of Materials
Storing of Materials — Bin Card and Stores Ledger
Storing of Materials — Bin Card and Stores Ledger
Once materials are purchased and received into the factory, they must be properly stored, recorded, and accounted for until they are actually issued for production. Two records lie at the heart of this store-keeping function — the Bin Card and the Stores Ledger — and though they serve a related purpose, they are kept by different people, in different places, and for different reasons. WBCHSE's Costing and Taxation syllabus draws on the same materials-control principles taught in CBSE/NCERT Accountancy's inventory chapters, so mastering these records here pays off across the wider Commerce stream too.
Bin Card
A Bin Card is a quantitative record maintained by the storekeeper, kept along with the actual material (at the bin, rack, or shelf where it is stored), showing only the quantity of receipts, issues, and the running balance of that particular item of material — no values/amounts are recorded on it.
A Bin Card is purely a quantity record. It is written up by the storekeeper the moment material physically moves in or out of the bin, so the balance shown on the card at any time should exactly match the physical stock actually lying in that bin. Because each bin (or rack/shelf) holds one specific item, a factory storing hundreds of different materials will have hundreds of separate Bin Cards, one per item.
Necessity of a Bin Card:
- It gives an up-to-date, at-a-glance quantity balance of each item, without needing to physically count stock every time.
- It helps the storekeeper know when stock has reached the Re-order Level (covered later in this chapter), so a fresh purchase requisition can be raised in time.
- It provides a quantity check that can be physically verified against actual stock at any time (a perpetual-inventory check), helping detect pilferage, spoilage, or clerical errors early.
- It fixes responsibility on the storekeeper for the accuracy of the quantities of each item under their charge.
Stores Ledger
A Stores Ledger is a record maintained by the Costing/Accounts Department (not the storekeeper), showing both the QUANTITY and the VALUE (₹) of every receipt, issue, and balance of each item of material.
Unlike the Bin Card, the Stores Ledger is a value record as well as a quantity record — every receipt is entered at its purchase rate, and every issue is priced under whichever method the organisation follows (FIFO, LIFO, Simple Average, or Weighted Average — studied later in this chapter), so that the cost of material consumed by each job or process can be correctly charged.
| Basis | Bin Card | Stores Ledger |
|---|---|---|
| Maintained by | Storekeeper | Costing/Accounts Department |
| Location | Kept with the material itself (at the bin/rack) | Kept in the accounts/costing office |
| Records | Quantity only (receipts, issues, balance) | Both quantity AND value (₹) |
| Entries made | At the time material physically moves | Usually a little later, from goods received notes / material requisition notes |
| One record covers | One specific item of material | One specific item of material, but priced under a chosen method |
| Purpose | Physical/quantity control at the storage point | Cost ascertainment and material accounting for costing purposes |
Since both records track the same physical item independently, the balances shown on the Bin Card and the Stores Ledger for a given material should always agree in QUANTITY — any difference signals an error or a genuine loss (pilferage, breakage) that needs investigation.
A quantity-only record maintained by the storekeeper, kept with the material itself, showing receipts, issues and balance — no values are recorded.
A quantity-cum-value record maintained by the Costing/Accounts Department, showing receipts, issues (priced under a chosen method) and balance in both quantity and rupees.