Results 1 to 4 of 4

Thread: Accounting help

  1. #1
    Silver Member
    Join Date
    Sep 2008
    Location
    Cape Town
    Posts
    466
    Thanks
    81
    Thanked 69 Times in 62 Posts

    Accounting help

    How do you, in the books, items that are ether:

    a) stolen
    b) items that have been returned broken and cannot be returned to the distributor?

    At the moment we are not showing them at all

    Cheers

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,646
    Thanks
    3,304
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12
    I use an expense account called Shrinkage for stuff that's wandered off in manner unknown.

  3. Thanks given for this post:

    Pap_sak (15-Feb-11)

  4. #3
    Silver Member
    Join Date
    Sep 2008
    Location
    Cape Town
    Posts
    466
    Thanks
    81
    Thanked 69 Times in 62 Posts
    Cheers for that Dave.

    So you treat this as an expense? And do you keep some sort of record? Obviously stock is treated as an asset, so you write the shrinkage expense off stock. That seems to make sense, my bookkeeper seemed to think there was nothing to write off...

  5. #4
    Gold Member Mark Atkinson's Avatar
    Join Date
    Jul 2010
    Location
    Melbourne, Australia
    Posts
    796
    Thanks
    212
    Thanked 150 Times in 117 Posts
    Blog Entries
    12
    Basically, you write stolen items off as an expense, typically "Loss due to theft" in your Income Statement. (This decreases your inventory in your books.)

    As for the damaged stock, this is slightly more complex, but you have the just of it. Inventory can only be valued at it's net realisable value. Thus, it stands to reason that you should decrease the value of your stock by passing off an expense. For this, Dave's suggestion of a shrinkage account is perfectly acceptable.

    I would keep records of both. How have you determined that stock was stolen? During a stock count?
    For your damaged stock just keep copies of the credit notes etc. (Documentation pertaining to those particular transactions) You could also keep a separate register of all similar transactions, for completeness' and ease of reference's sake.

  6. Thanks given for this post:

    Pap_sak (15-Feb-11)

Similar Threads

  1. Anyone who needs TAX / Accounting Advice
    By eitai2001 in forum Tax Forum
    Replies: 83
    Last Post: 28-Aug-18, 10:03 AM
  2. [Question] Pastel Accounting
    By JohanS in forum Technology Forum
    Replies: 13
    Last Post: 10-Jul-14, 07:33 AM
  3. [Question] What is the accounting software for me to use?
    By Mark Atkinson in forum Technology Forum
    Replies: 10
    Last Post: 27-Jul-10, 11:24 AM
  4. CC Accounting Officer
    By Sebzon in forum Business Finance Forum
    Replies: 12
    Last Post: 27-Jan-10, 05:50 PM

Tags for this Thread

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •