Manufacturing
Provision for Raw Material Obsolescence
Creating a reserve for materials that are expiring or no longer needed due to product design changes.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Inventory Obsolescence Expense | Expense (+) | 1,500.00 | - |
| Allowance for Obsolescence | Contra-Asset (+) | - | 1,500.00 |
💡 Accountant's Note
Instead of removing the material physically, we create a 'bucket' (allowance) to show that some of our stock is likely worthless.
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