When Zero Cost valuation is selected, inventory will be valued at zero cost irrespective of the purchasing rate and current balance at hand.
This is extremely useful in sub-contracting environments, where material quantities need to be tracked which are received from the principal, but which do not carry any monetary value with respect to our own books.
Entries are shown below:
Date |
VCh Type |
Inwards |
Outwards |
||||
|
|
Quantity |
Rate |
Value |
Quantity |
Rate |
Value |
01/04/09 |
Purchase |
10.00nos |
100.00 |
1000.00 |
|
|
|
02/04/09 |
Purchase Bill Pending |
2.00nos |
175.00 |
350.00 |
|
|
|
03/04/09 |
Purchase |
10.00nos |
200.00 |
2000.00 |
|
|
|
04/04/09 |
Purchase |
25.00nos |
225.00 |
5625.00 |
|
|
|
05/04/09 |
Sales |
|
|
|
10.00nos |
300.00 |
3000.00 |
06/04/09 |
Sales |
|
|
|
15.00nos |
400.00 |
6000.00 |
|
|
47.00nos |
183.50 |
8975.00 |
25.00nos |
360.00 |
9000.00 |
When these entries are passed in Tally.ERP 9, the closing stock value will appear as shown below:
In the stock item master, when the costing method is selected as ‘Zero Cost’, closing value will be ‘Zero’.