Transfer of Materials: Definition

The direct transfer of surplus materials from one job or work order to another is, as a rule, undesirable. It should be discouraged as far as possible.

It is, however, justified when an urgent job must be completed. In these cases, it may be necessary to appropriate surplus materials to avoid the delays inherent in the normal routine of returning materials to stores and then re-issuing them.

Material Transfer Note: Explanation

All transfers of materials must be accompanied by a material transfer note.

This note is signed by the foremen of the sending and receiving departments and forwarded to the costing office, where the necessary adjustments are made in the respective job accounts.

Specimen/Format of Material Transfer Note

A specimen of a material transfer note is given below.
Format of Material Transfer Note

Frequently Asked Questions

Can I use the same note for transferring both materials and equipment?

A material transfer note can be used for transferring materials, equipment, stores or work in progress. However, it is advisable to have separate notes for different types of activities.

How do I handle discrepancies between the records on hand and those on a computer?

Discrepancies are common when transferring materials between different departments or locations. In most cases, the receiving department would have the final say on the quantity and quality of the transferred materials. The discrepancies should be resolved and appropriate adjustments made to the job accounts before the final Financial Statement is prepared.

What happens if there is no material transfer note?

If there is no material transfer note, the materials are assumed to be transferred on account of internal transfers.

What happens if there is no receiving department's signature?

If there is no receiving department's signature, the materials are assumed to have been issued by the sending department and not returned at all. If this is not possible due to some reason, the receiving department should sign the material transfer note with 'received in part' notation.

What is a material transfer note?

A material transfer note is a document used for recording the direct transfer of materials from one job or work order to another. It is signed by the foremen of the sending and receiving departments and forwarded to the costing office, where the necessary adjustments are made in the respective job accounts.

Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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