Retail
Customer Return — Damaged Item (Not Restocked)
Customer returns a damaged item that cannot be resold.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Sales Returns & Allowances | Contra-Revenue (+) | 100.00 | - |
| VAT Output Tax Payable (16%) | Liability (-) | 16.00 | - |
| Cash in Hand (Refund) | Asset (-) | - | 116.00 |
| Inventory Loss — Damaged Returns | Expense (+) | 55.00 | - |
| Cost of Goods Sold (Reversal) | Expense (-) | - | 55.00 |
💡 Accountant's Note
Revenue is reversed but the item cannot return to stock. The COGS reversal moves the cost out of COGS and into Inventory Loss — reflecting the economic reality that the goods are gone with no resale value.
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Expert Analysis by Qusai Ahmad
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