One of the items you manage in your warehouse fell and broke so you throw it away. What document should you add to record the removal of the Item from the inventory?

Question

Options

• ARetirement
• BGoods Issue
• CGoods Return
• DInventory Transfer

• A
  3% (1)
• B
  83% (25)
• C
  10% (3)
• D
  3% (1)

Explanation

Goods Issue is correct because it records the removal of stock from inventory for any reason that permanently reduces on-hand quantity - including disposal of damaged or broken items. It updates the inventory records to reflect that the item no longer exists in stock.

Retirement (A) applies to fixed assets (like machinery or equipment on a balance sheet), not consumable or general inventory items - it's a different accounting process entirely.

Goods Return (C) is used when items are sent back to a supplier, implying a reversal of a purchase - a broken item thrown in the trash has no return destination.

Inventory Transfer (D) moves stock between locations (e.g., bin to bin, warehouse to warehouse) - the item stays in inventory, just in a different place.

Memory tip: Think of "Issue" as inventory leaving your control for good. Whether it's issued to production, a customer, or a dumpster, a Goods Issue is the document that says "this stock is gone."

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