Outrageous Inventory Loss Journal Entry
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Inventory loss journal entry. So the value of the Inventory has gone down or has only scrap value. Inventory purchase journal entry. Accounting Journal Entries for Inventory Write-down.
Loss on inventory write-off is an expense account on the income statement in. Otherwise the inventory asset will be too high and so is misleading to the readers of a companys financial statements. Inventory Shrinkage Journal Entry Following is the example of journal entry for an inventory shrinkage that makes for you to record this event.
The journal entry above shows the inventory write-off expense being debited to the Loss on inventory write off account. The debit will be to either the raw materials inventory or the merchandise inventory account depending on the nature of the goods purchased. Inventory journal entry examples.
For this example assume that the inventory shrinkage is 500. If the journal entry for recording the normal loss stock is being recorded any time during the accounting period then Purchases ac has to be credited since the Trading ac and Cost of Goods sold ac would not be available in the books of accounts as they are accounts that are created only towards the end of the accounting period. If the journal entry for recording the abnormal loss stock is being recorded any time during the accounting period then Purchases ac has to be credited since the Trading ac and Cost of Goods sold ac would not be available in the books of accounts as they are accounts that are created only towards the end of the accounting period.
An entry must be made in the general journal at the time of loss to account for the shrinkage. Account for the stolen inventory by debiting cost of goods sold for the value of inventory 500 and crediting inventory. The write down of inventory journal entries below act as a quick reference and set out the most commonly encountered situations when dealing with the double entry posting of inventory write downs.
Lets take a look at a few scenarios of how you would journal entries for inventory transactions. Sometimes it may loss by accident while dispatching the goods. Click the Plus icon and choose Journal Entry under the Tools column.
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