To write off damaged/lost/stolen inventory items, you must perfom two steps:
1. Add an inventory adjustment to the inventory stock item.
Go to the Stock Item and Edit it.
Select the Status/Adjustment tab
Add a new adjustment
Enter a minus quantity/amount into the On Hand, Paid For, and Cost Adjustment fields.
- Select OK to save the adjustment.
The above example records two damaged vases that cost $25 each.
2. Lastly, you will need to make a change to the Inventory G/L account. To do this, you will enter a journal entry. The entry will credit the Inventory account and debit an expense or cost of goods sold account for Damaged Inventory or Goods.
