Write Down of Inventory Journal Entries

The write down of inventory journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of inventory write downs.

In each case the write down of inventory journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.

Typical Write Down of Inventory Journal Entries


To write down obsolete inventory
Account Debit Credit
Loss on inventory write down XXX
Allowance for obsolete inventory XXX

To write off inventory
Account Debit Credit
Loss on inventory write down XXX
Inventory XXX

To write off inventory using a fully provided obsolescence allowance
Account Debit Credit
Allowance for obsolete inventory XXX
Inventory XXX

To write off inventory using a partially provided obsolescence allowance
Account Debit Credit
Allowance for obsolete inventory XXX
Cost of goods sold account XXX
Inventory XXX

To dispose of obsolete inventory at net book value for cash
Account Debit Credit
Cash XXX
Inventory XXX
Allowance for obsolete inventory XXX

To dispose of obsolete inventory at a loss on net book value for cash
Account Debit Credit
Cash XXX
Inventory XXX
Allowance for obsolete inventory XXX
Cost of goods sold XXX

To dispose of obsolete inventory at a profit on net book value for cash
Account Debit Credit
Cash XXX
Inventory XXX
Allowance for obsolete inventory XXX
Cost of goods sold XXX
Last modified November 13th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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