Rejected Stocks - Proper inventory and accounting

Hello! I’m running a retail store and sometimes receive damaged stock from my supplier. I book this by making a Purchase Receipt and filling up the accepted and rejected fields. I also selected a warehouse for the rejected stock as this was required.

Now i would like to know how this rejected stock should be interpreted in the accounting side (chart of accounts), since now it is booked in a warehouse together with my other warehouses under stock assets? What is the proper implementation and checking of this?

Accounting Entry when you received this item.

Dr. Rejected Warehouse… XXX
Cr. Stock received but not billed … XXX

If you don’t create Purchase Invoice for the rejected items, then in the Stock Entry of Material Issue (when returning to supplier), select “Stock Received but not Billed” account in the Difference Account field.