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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4196
Experience:  FCCA FCMA CGMA ACIS
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Can you tell me how to write off employee theft in food retail/manufacture

Customer Question

Can you tell me how to write off employee theft in food retail/manufacture accounts and what would be the double entry requirements please?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question.

The solution to your problem might be described as being as long as the proverbial piece of string as there are many book keeping scenarios.

However, suggested book keeping transaction would be Debit [a new account, say Theft Losses], Credit Stocks. The new account would be written off against the profit an Loss account at the year end. Alternatively, ihe loss could be written off against the P & L account immediately. Any insurance claim or other compensation received would reverse, in part or in full, such journal entries, but may, of course, not cover all losses. Compensation ordered by a Court would not be liable to taxation and would have to be annotated to ensure that the tax computation is correctly calculated.

I do hope I have been able to resolve your conundrum.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.