Demo stock in accounts

Coala

Hi, could somebody help me with this. I have a demo stock what is time to time lost or replaced during the accounting period. How do I treat that in may books. Is demo stock going stright to profit and loss as an expense or do I keep opening and closing stock? Really confused
Thanks

Little Miss Cutie

It really depends on what happens with the demo stock. For example do you ever sell the demo stock?

If the demo stock is fit for sale then it should be included in stock.
If the demo stock is unsuitable for sale -ie medical stock which is unusable once opened- it should be included as an expense.
I hope this helps.

Coala

Demo stock is usually lost somewhere and is not possible to know when it will happen. It can be lost or broken in one year or in 2 years. For example demo wheelchair given to hospital.And it probably will not be resellable.Confusing part is if demo is lost next accounting period and it would not be proper to include in current year as an expense. Or I am wrong?

Coala

any ideas?

Little Miss Cutie

Its quiet straight forward either it is worth something or not.
I think from what you said it should just be a cost of sale in the year purchased. Think of it as something simple like buying stationery you generally expense it in the year its purchased but there is still some left at the end of the year but you don't count it as stock.
Does this help?

Coala

thank you so much it really makes my life simlier,thanks

Little Miss Cutie

Your welcome Glad I could be of some help