Ref: Inventory Sale Price is Less than its Cost Price for 2 separate Inventory Items
Hello Active Users
I need to make an entry but i cant find its solution as to how.
For Example:
I have current inventory in hand, Inventory X Values at $ 4000 and Inventory Y Values at $ 1000.
These are the cost price under inventory tab. Now lets say my sale for Inventory X & Y is at $ 1,500 as a Total Lot where in the Price of Each inventory has gone down and i have sold it at a Scrap Price. How would i take in this entry as i need to show a sale of $ 1500?. Will it also reflect $ 3500 as an inventory write off Expense ?
The sale price of an inventory item on either a receipt or sales invoice is independent of the sales price you may have included in the inventory item definition. The sales price in the inventory item definition is only a convenience, and is optional. If you enter one, it will autofill on the transaction form when you select the item. But you can always edit it.
Whatever price you sell the item for will be posted to the appropriate income account, normally Inbventory - sales. Its current average cost will be posted to Inventory - cost. If you sell for less than the current average cost, this will be reflected as a negative contribution to net profit. This is not a write-off. It is only an unprofitable sale. Inventory write-offs are used only for non-revenue transactions, such as when inventory is lost or damaged during storage.
To summarize, enter such a transaction exactly as you would any other sale.