I need to write off 200.00 pounds of damage stock. Am I correct in reducing inventory / Stock by 200.00 pounds as well as reducing the Owners equity account by 200.00 pounds. What else must be done to complete the transaction I need some kind person to shine a light into the tunnel
Dont know how VT records it but if you are just writing down some stock isnt it just a case of reducing the closing stock in the profit and loss and balance sheet.
I do not think that is the case as the value of stock/inventory is added to the assets and also to the owners equity which I believe is correct. Surely there is a part I am missing to complete the transaction. By reducing both of these account is only part of the transaction, and to me seems incomplete. Hopefully someone else will try and give an answer.
Hello Mark and Tony. Ten thousand apologies Mark you were right and I was wrong. Your explanation just seemed too simple for me to grasp. However Tony painted a larger picture and this helped the penny to drop. Thank you both for your kind effort to help me