The Journal Entry for Inventory Write-Off is a specific type of entry that businesses make when an item has been taken out of the inventory that cannot be sold. This could be due to a variety of factors such as damage or obsolescence, among others. Making this journal entry is necessary in order to properly adjust the books and ensure accuracy in the company’s financial statements. When recording the write-off, the value of the inventory is transferred from the inventory account to an expense account within the general ledger. This adjustment provides visibility into the cost of goods that are no longer usable and allows for corrective action to be taken if needed.