Accounting for damaged/destroyed items. I don't use Inventory so it's purely about removal from CGS

Why should it be removed. CGS is the expense (cost, the amount you paid) of what was sold. The damaged/lost/stolen items are still an expense of what was sold.  If you did keep inventory and you found a damaged item in stock, you would remove it from stock with an inventory adjust, but the cost of that item would go to a sub account of COGS called COGS shrinkage.

I appreciate the quick answer but I'm under the assumption that CGS is only relevant when the item is sold. Hence the reason that I need to take Inventory at the end of the year so I can remove any items not sold from my CGS total.

Does it not fall into a different category for that reason? 

Thanks for following up, Kvosburgh.

In this instance, I recommend consulting with your accountant for the next steps. They'll be able to tell you the best way to enter your Cost of Goods Sold data based on your business setup. 

If you don't currently have an accountant you can find one in your area specifically trained in QuickBooks by searching here: Find a ProAdvisor

Please feel free to reach back out if you need assistance with the entry or have any other questions. Take care!