Which Account Type should be used for Stock loss

We need to differentiate various channels through which we loose stock. So that end of the year we know, how much loss we had in each category. So under the DirectExpenses::StockExpenses folder we created our categories such as LostOrStolen, DamageOrExpiry, GiftsAndCompliments, SamplesForCustomers etc. So that whenever we have stock loss in above category, we do a Material Issue and choose one of these Account Heads in the DifferenceAccount of the document.

I have couple of questions

  1. What should these new account heads AccountType be set to ? I have put it as “Expense Account”. Is this fine ? Or should i be choosing “Stock Adjustment” account type for the account heads?
  2. Or it doesnt matter at all, as long as its under the Expenses (P&L type). Automatically P&L will consider it calculate P/L

Pls let me know.

Account Type become critical if you have to hit that particular account from different document types. For example if you only use this account in stock reconciliation doctype then “stock Adjustment” is ok but if you also have to use that account in Purchase Invoice aswell then you have to change account type to Expense Account

1 Like

Thanks for the eye opener. It really helped @ushashmi