This should be an asset account, and is used when an item is marked scrapped. When items are marked scrapped, The Edge is finished with them; therefore, much like RTV, this posting moves the item value from your primary asset account to this temporary sub-asset account.
You will have to post your own General Ledger entries to move assets from this account to other accounts when you determine the retained value of the scrapped goods and how much to write off.
Procedures
When you scrap an item in The Edge, it:
- Debits INV Scrapped Goods
- Credits Inventory Edge.
If scrapped goods are recovered as materials, and you receive payment, in QuickBooks, you should:
- Debit Scrap COGS
- Credit INV Scrapped Goods
- Debit Cash
- Credit Scrap Sales.
If the value of these scrapped goods should be recorded as a loss, make your accountant aware of that value so he or she can do so.
NOTE: If you must pay for labor to disassemble a scrapped part, be sure to post for only the actual parts.