I have a retail shop trading as a Limited Company.
We take items of stock such as stationary, cleaning products, milk etc for use by the business but do not actually pay for them at the till. What is the best way to account for these items?
Thanks in advance
Stuart
It won’t affect your bottom line net profit/loss so I’m not sure how important it is to account for them at all, but if you want to be strictly correct you could journal the ex-VAT cost price over from credit General Purchases - where they would have gone originally when you bought them for resale - to debit the relevant overheads codes (stationery, cleaning, staff welfare, etc.). This will increase the gross profit line on your P&L but the change will be countered by an increase in overheads so your final net profit is unchanged.
Obviously if you were taking things out for your personal use rather than for use in the business then you would have to treat that as a normal sale (either paid at the till as normal or paid into your “director’s loan” account to record that you owe the money back to the company).
Sorry for the late reply, thank you