When stocks are missing, either they are sold to the person in charge of the store/branch as per normal sales at cost price, or if the company's policy is to absorb the costs, see below on the pros and cons of different procedures and steps, accountant should be aware of the implications of each method.

Analysis:

When a stock is lost, 2 things happen:

a) Stock is deducted (reduced)

b) There is no money collected, and no debtors are created.

In Wavelet, we recommend the following:

1) Create a customer account called "STOCK LOST"

2) Invoice the stock out

    a) At cost price

    b) At zero

    c) At normal retail price

Users could choose to sell at whatever price they want, the impact on selling price will affect the following:

    a) At whatever price, the cost of goods sold would be the same.

    b) Selling at cost means gross profit will not be affected, sales are higher (boosted).

    c) Selling at retail price means gross profit will be higher, but at the same time, expenses are also higher.

    d) Selling at zero amount would means it will reduce the Gross Profit, sales figure are not affected, and expenses are zero (because everything is charged to Cost of Goods Sold).

Since there's no money collected, when a user invoice out these stock at a price higher than zero, no money is collected. User could choose a specific cash book under (OTHER section) inside the CUSTOMER -> SETTLEMENT. Normally, if the cash book is tied to a GL CODE that of type "Expenses", then the expense account would be debited in the Profit and Loss Statement, instead of cash/asset being debited for normal cash sales or settlements.