Inventory discrepancies in the purchase/sale of goods

Inventory discrepancies are deviations between the stock count in the warehouse (so-called inventory) and the one according to the accounting records. The causes and handling of inventory discrepancies are the subject of this article.

Inventory discrepancies can be based on the following causes:

• Incorrect bookings
• Theft
• Shrinkage, i.e., the natural reduction in weight or volume during long-term storage of certain products (e.g., liquids)

Inventory discrepancies are often negative, meaning that the inventory results in a smaller quantity than is shown in the accounting records, but is actually not present in the warehouse (so-called inventory shortage). Accordingly, they must be written off from the stock records.

Accounting entry: Goods expense/Goods stock