oboloo Glossary

Inventory Write Off Journal Entry

oboloo Glossary

Inventory Write Off Journal Entry

A write off of inventory is a journal entry that reflects the removal of inventory items resulting from damages, theft, obsolescence, or other reasons, from an entity’s records. This entry involves debiting the cost of goods sold account and crediting the inventory account. The journal entry to write off inventory also involves an analysis to determine the exact cost associated with such motion. It is usually done in order to minimize potential losses from such bad inventory when it cannot be disposed off for any value.