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Systemwide accounting procedures

Accounting Integrated Statewide Record System procedures

Resale Activity

Inventory Balances

Some expenses, such as the sale of merchandise in an enterprise fund, are directly related to revenue and should be recognized at the same time as the revenue. The cost of the product sold is recorded when the sale is complete, not when the item was purchased. At the time of purchase, it is placed in inventory.

In systemwide accounting, you record inventory purchases in a cost center (Object Code 3101 – 3199) instead of a general ledger. Therefore, you need to make an adjustment to update the general ledger. You must make this update to reflect the June 30 balance as it is needed for financial statement purposes. However, you can make additional updates any time during the year. You can update each detail inventory object code or record all inventory balances in Object Code 8399. The accounting entry is as follows:

Inventory has Increased since Last Update

Inventory has Decreased since Last Update

Cost of Goods Sold

Cost of goods sold is calculated as follows:

Once you make the update to your general ledger for inventory, the amounts in Object Codes 3101 – 3199 will be the cost of goods sold.

If you have questions or comments please email us (accounting@so.mnscu.edu) or refer to the staff directory link at the top of this page for additional contact information.