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Stock help

Stock help

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We run a small Plant Nursery. How do we account for stock that is thrown away because of disease or similar. We will be disposing of a lot due to the extreme cold this year. Is it added to the profit and loss account as per Bad Debt or is there another accepted way of accounting for it.

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By ste99
27th Jan 2011 18:29

it will be already be shown in purchases

and the fact it is thrown away will be reflected in the lower closing stock figure at Y/E

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By Richard Willis
27th Jan 2011 19:35

Except ste99

That if they are using an accounting package the chances are that goods receipts will be booked into stock, not purchases.

Plantsman,  You simply need to Dr P&L and Cr stock.  How you need to do this will depend on the system you are using.  In mid-range ones it would normally be achieved by adjusting the stock levels to actual remaining thereby writing off the losses automatically.  If you need futher help do please ask.

 

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By firtrees
27th Jan 2011 21:13

Why would you post purchases to Balance sheet stock?

 

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By Chris Smail
28th Jan 2011 09:09

Because

You are running a proper business with significant stock which is controlled in a proper manner, not a corner shop.

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By Richard Willis
28th Jan 2011 13:09

And because

untill you sell it that is what it is!

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