Writing off stock

[monaghan]

Scenario

I make 20 fresh cream cakes, package them and take to market, I sell 10 and bin the other 10 as they are fresh and won't keep until the next market.

For accounting purposes, how do I record the 10 in the bin? I've bought the ingredients and packaging so do I simply record what the cakes cost me or did the cakes become stock and assume the retail value when I took them to the market?

If I managed to sell 5 of these unsold cakes for half price at the end of the day, how would this impact the accounting?

 

[Scalloway]

The value of sales goes to sales. The cost of making them goes to purchases.

Any record you keep of wastage would be separate from your accounts in any accounting system I have used. You should keep such a record in case HMRC enquire about your gross profit percentage.