We run a hire business, and some of our equipment has not been returned. We have charged the client and replaced the item, however, how do I reflect the loss in the stock nominal code?
Do I create a journal entry and use the ‘closing stock’ nominal code to write it off? Is closing stock shown as a loss?
Is new equipment same price as old one? if yes then no need to do any thing
Thanks for your reply.
The new equipment is roughly the same price, however surely I need to remove something from my ‘Stock’ nominal code otherwise my stock figure is just going to artificially increase.
You can record sale of old equipment and purchase of new equipment
However there is no sale because the equipment has been lost.
I understand the recording of the replacement equipment, however i don’t know how or where to show the ‘stock out’ of the lost equipment.
Currently for example my stock shows that I own both therefore giving me a false bottom line of assets.
Just record reverse entry you did for initial purchase of equipment. e.g
New purchase as usual
Does that not fudge the turnover figure though?
It will have same effect on profitability , if you want to credit sales account that is fine, if you do sell equipments as part of normal trade
Hi. I’m still having a few issues with this.
If i credit the old the old Purchase and add the new one, it throws the bank account out as we have obviously purchased and paid for both.
but did you not charge customer for the lost equipment? you should debit bank for that
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