How to recode inventory usage


For my cinema I have inventory which we sell (wine, snacks). On occasion we treat our volunteer staff and use some of that inventory, absorbing the costs. However, recording the inventory use as either zero cost or as written off impacts the average profit/average sale price in reports - which I don’t want to do as this relates to our “proper”/commercial sales.

What’s the best way of handling this ? Is there a simple way to recode that inventory use and re-categorise it as (e.g.) “staff entertainment” in a way which doesn’t impact average sale/profit records ? The only solution I’ve come up with (and which doesn’t fully solve the problem) is to sell the inventory at cost as one line item and then reallocate the funds to “staff entertainment” (but since I’ve both bought and sold the inventory it presumably impacts on the profitability).

Hope that makes sense. NB I am not an accountant so I’m sure this phraseology will be wrong.

Are you talking about a complete inventory item - bottle of wine - or part of an inventory item - a glass of wine from a bottle ?

For the sake of this, I’d assume a complete inventory item (it would be impolite to leave a bottle half empty !)

For a complete Inventory item, you would use Inventory Write-off and for the Allocation (account) Staff Entertainment.

Doing this shouldn’t affect reports sale/profit records as Sales or Cost of Sales accounts aren’t involved.

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Thanks - I’ll have a play around with this in a sand pit.