Stock Loss

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
How is wasteage of stock in a small grocery business entered into its accounts?<BR>How is the total sum arrived at and what is the double entry?<BR><BR>Many thanks for any help you can give. <BR> <BR> <BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Stock Loss

    The reason for showing stock loss separately is to help maintain a meaningful gross profit percentage. If purchases are left as they are they will be overstated.<BR>Either credit purchases and debit stock loss in an intermediate position, similar to other operating income or put in expenses like bad debts.<BR>An argument about this between a lecturer, not me, and an HNC student went to the SMT of the college and almost cost the lecturer his job!

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