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I sell makeup products and found some are expired and have to throw them away. How can I register the total amount of the inventory loss? Thank you.
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It depends on how you track inventory. You can mark it out as an expense but, if you do that, you need to reduce your inventory by the same amount in QB. If you're using QBSE, I don't think you can do that since it requires a journal entry. Or, you can just dispose of it and do nothing. Then, when you take a physical inventory at year-end, it will be expensed to cost of goods sold because it will reduce your ending inventory amount. This assumes that when you purchase inventory, you are assigning it to an inventory (or purchases) asset account and not to an expense account.
Thanks for visiting us today, @Blizzmarts.
I'm here to ensure that you can register the expired inventory in QBSE. For the inventory purchases that are already expired, you can categorize them as Materials and Supplies. Though, I'd still suggest consulting your accountant first to ensure that you can register the total amount of the inventory loss.
Here's how:
To learn more about Schedule C categories, check this article: Schedule C and expense categories in QuickBooks Self-Employed. It also includes details about how they appear on your reports.
Also, I'm adding these articles for future use. It provides steps on how to correctly categorize your expenses and a brief overview of QBSE:
If there's anything else you need help with concerning QuickBooks Self-Employed, please let me know. I'm always here to help, @Blizzmarts.
It depends on how you track inventory. You can mark it out as an expense but, if you do that, you need to reduce your inventory by the same amount in QB. If you're using QBSE, I don't think you can do that since it requires a journal entry. Or, you can just dispose of it and do nothing. Then, when you take a physical inventory at year-end, it will be expensed to cost of goods sold because it will reduce your ending inventory amount. This assumes that when you purchase inventory, you are assigning it to an inventory (or purchases) asset account and not to an expense account.
Thank you so much for the information. It was very helpful to continue register these transactions. I appreciate your support.
Thank you for your support. I found your response very helpful because you are right, I use QBSE and log the purchases in a separate file as inventory to report at the end of the year; in this sense, your explanation was the solution for my case, now I can proceed to make the adjustments to inventory and costs of goods. I appreciate your kindness.
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