Accounts not getting effected when sold item for free

Accounts not getting effected when items are sold for free.
even if the item is sold for free cost of goods sold should get hit.

But an item is sold for free even the stock in hand does not get effected it still shows as rate in stock in hand.

E.g ] i brought 5 units of item A at 5 each.
Account: it will put 25 in stock in hand: assests .
currently if you see the balance sheet it will look something like

Now if i sell 3 units for free at 0 cost balance sheet does not change or even profit and loss

After that i sell 2 units at its normal cost 7 then i look at balance sheet it looks like

which is absolutely wrong , as i dont have 15 in stock in hand as i already sold those pieces for free(threw them) so stock in hand should be 0 and cash and sales should be 14…

Check out P&L report

Its wrong i dont have 4 profit , i should have -11 loss, as stock expenses should be 25 as my stock is empty now.

please resolve this critical flaw with haste.


Ideally, it will book expense for the items, irrespective of it’s selling rate.

Can you please elaborate how did you stock-out the items for free? Please share the stock ledger and general ledger created for entry.

Here is after adding stock with stock entry


Then sold the item for free with 0 rate.

Corresponding GL


The Snapshots of how the balance sheet is effected is above.


@umair, could you replicate it??