Question

Hao is completing inventory and found four boxes of lightbulbs out of twenty that were crushed. What is the best method to adjust his inventory records to reflect the damage?.

Answer 1

Record keeping in business is very vital.. The best method to adjust his inventory records to reflect the damage is that;

• Record a journal entry to change the value in the Inventory asset account to reflect the value of 16 boxes of bulbs.

How do one record damaged inventory?

In inventory keeping, one can set up an inventory write-off expense account so as to be able to record the value of a damaged inventory.

When a person make an entry into the inventory write-off expense account, it is advisable to lower  the amount of inventory found on the books.

One can Debit the cost of goods sold account and later on credit the inventory write-off expense account.

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