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Post Info TOPIC: Stock write off
Mary Lou


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Stock write off
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Can anyone inform me how writting off stock at year end should be disclosed on the profit & Loss sheet.

Should it be disclosed as a seperate item in cost of sales or included in the closing stock value? and an explanitory note in the accounts?

Thankyou in advance

 

 



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MarkS


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Hi Mary

You dont include it anywhere.

Say you had closing stock of £1k then your journal to incorporate would be

Dr Stock (BS)  £1k

Cr Stock (P&L) £1k

If you decided to write of say £200 of the stock as old/bad then you would  show £800 as closing stock then the journal would be

Dr Stock (BS) £800

Cr Stock (P&L) £800

As closing stock is only a period end adjustment then any write off of the stock isnt shown anywhere.  All you are doing is reducing the period end journal which you would have originally posted.

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
Mary Lou


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Posts: 8
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Thanks for that



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