What is the primary purpose of a stock ledger?

The primary purpose of a stock ledger is to record and summarize stock transactions. This ledger serves as a detailed record that tracks all activities related to stock, including purchases, sales, transfers, and any adjustments in stock levels. It provides essential insights into stock movements and balances over time, helping businesses manage inventory effectively.

Additionally, a well-maintained stock ledger aids in the reconciliation of stock counts and assists in financial reporting by providing accurate information on stock on hand and cost of goods sold. This information is crucial for making informed decisions regarding inventory management, ensuring that the company can meet demand while minimizing excess stock.

By summarizing stock transactions, the ledger also facilitates better visibility into trends regarding stock turnover and can help in identifying issues such as shrinkage or discrepancies in inventory records. Overall, the stock ledger is an important tool for effective inventory control and financial accuracy.