Retail
Clearance Sale — Markdown Below Cost
Selling end-of-season inventory at a price below cost to clear shelf space.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Hand | Asset (+) | 34.80 | - |
| Cost of Goods Sold | Expense (+) | 55.00 | - |
| Sales Revenue | Revenue (+) | - | 30.00 |
| VAT Output Tax Payable (16%) | Liability (+) | - | 4.80 |
| Merchandise Inventory | Asset (-) | - | 55.00 |
💡 Accountant's Note
When selling below cost, COGS exceeds revenue — a deliberate decision to recover partial value. If an NRV write-down was previously recorded, the COGS entry would be at the written-down value instead.
Professional Excel Template
Get the automated version of this entry. Includes built-in IFRS checks, VAT calculators, and SAP-ready upload formats.
QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.