View Full Version : Selling Free Goods

08-14-2001, 02:31 PM
We are currently using Complete Accounting 7.0. We use the inventory function to track our merchandise. We ocassionally come across situations that our vendors accidentally send us free merchandise with our orders. We want to sell these items with a zero cost but do not want to set up a new item that will appear on the customers invoices. When we bill our customer using the original item number, the qty. goes negative. I can correct that by posting an inv. adj. which will correct the qty., COG., and inventory value but the customers records show the cost of the original item so when I want to know that customers GP%, it's incorrect. Anyone have any suggestions on how I can handle this easier in the future?

08-16-2001, 10:01 PM
I believe that the solution to your problem is linked to the costing method and how you book these additional free goods.

Do you include these goods with the goods actually purchased. If yes and you're using average cost method, the peach will simply spread the cost of the goods purchased, across all the goods received in the invoice, hence a cost will be attachd to the free goods.

If you're are running either LIFO or FIFO, you can bring the goods in through inventory adjustments at no unit cost, or do a seperate purchase invoice again with no unit cost.

The goods would have no cost attached to them, then when you sell the goods the cost of sales would be nil.

I dont think this will work with average costing though based on what i explained in the beginning.

I hope this helps