Own product used for company staff

What will be an accounting treatment if Company having business of selling Home appliances
And out of those 1 no. Refrigerator used for staff company accommodation
Replies (5)
Quick Summary
This discussion explores the accounting treatment for a company's own product, like a refrigerator, used for staff accommodation. The consensus leans towards treating it as an administrative expense and removing it from inventory, rather than classifying it as a fixed asset. Further entries might be needed to account for the cost of goods sold and any potential loss.

Put it into admin expenses and reduce inventory.

Admin a/c

To Inventory a/c

I think people derecognise purchases in trading account method, it is not necessary in cos method. 

 

 

Or we can show fixed asset also
No it will be not shown as fixed assets.

It will be shown as staff's accommodation assets and shown in staff's ledger

All right now I got it, it can be like

Admin exp a/c

To Purchases a/c

and 

Accommodation Asset a/c

To Inventory a/c

I forgot one more point, this Purchases is a pain to account for as it does not cover the production costs of finished fridge.

so another entry

COS a/c

Loss on fridge 

To Inventory a/c

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