Your Ask Joey ™ Answer

What is the journal entry to record damaged inventory?

When inventory is damaged, the company must recognize the cost of that inventory in cost of goods sold (assuming that some level of damage is normal).

The journal entry would be to debit cost of good sold (a specific damage account) and the credit would be to inventory (reduce the inventory).

If you are studying for the CPA exam, then sign up for a free trial to have full access to the Universal CPA platform for 7 days using the button below:

Universal CPA is the only course that has visual learning and bite-sized video explanations for every single MCQ and simulation. To learn more about the Universal CPA course and see a demo of the course, visit this link.


Back To All Questions

You might also be interested in...

  • Discontinued Operations on the FAR CPA Exam

    Overview of Discontinued Operations In financial reporting, discontinued operations refer to a component of a company’s core business or product line that have been divested or shut down. Discontinued operations will be reported (net of tax) separately from continuing operations on the income statement. The reason that discontinued operations are reported separately is so that...

  • Equity Method Excel Workbook

    If you would like to use the Excel workbook that was used to create the Universal CPA lecture on the equity method, please click the link below to download the Excel workbook: Equity Method Lecture Example https://youtu.be/QE4flnmuSkw

  • How Hard is the CPA Exam?

    So you’re thinking about taking the CPA exam? Whether you have a dream of becoming a tax advisor, feel as though you need public accounting experience, or just want to solidify your business acumen, the CPA license is one of the most prestigious and well respected licenses in the business world. The exam itself is...