Inventory Shortage Expense
Code: 5118
👁 Views: 73
Account Information
| Financial Statement | Income Statement |
| Normal Balance | Debit |
Definition
Represents the difference between book inventory and actual count when a shortage exists. This expense is part of cost of goods sold as it reflects inventory loss or damage.
📐 IFRS vs US GAAP Accounting Treatment
IFRS
IAS 2
Inventories
US GAAP
ASC 330
Inventory
❓ Frequently Asked Questions
Q: How is inventory shortage recorded after counting?
A: Dr. Inventory Shortage Expense, Cr. Inventory (shortage quantity × average cost).