Account 94 “Shortages and losses from damage to valuables” is used to display the company’s costs due to the discovery of shortages or damage to inventories, fixed assets or goods (for example, during inventory).
Account 94 in accounting is used by legal entities to display information about detected shortages or costs from damage to valuables (including cash). These losses can be detected both during the procurement and storage of goods, for example, during inventory, and during transfer to the buyer.
Account 94 is active. The debit displays the following amounts:
- actual cost of inventory items for which shortages or damage were discovered during inventory (actual cost means the accounting price of inventory items plus transportation and procurement costs);
- residual value of capital equipment for which shortages were identified during inventory or damage was discovered (residual value means the original cost of fixed assets reduced by the amount of accrued depreciation).
- calculated costs for partial damage to inventory items, etc. (if these goods can then be sold at a discount or used).
Something to keep in mind! Transactions on Dt94 are displayed in correspondence with accounts for recording these values (10,01,41, etc.).
Information about the write-off of expenses is entered into the account credit:
- if the guilty person is identified - to the debit of the accounts of settlements with employees (account 73) in the amounts determined for reimbursement from the employee;
- in the absence of guilty persons and in excess of the norms of natural loss - on the financial result of the enterprise (Dt91);
- within the limits of natural loss norms - to the debit of production accounting accounts (damage or shortage is detected during the storage of goods) or sales costs (if damage or shortage of goods is detected at the time of sale);
Note from the author! Write-off of shortages and defects according to Kt94 is carried out in the amounts and quantities for which the inventory data were entered in Dt94. Amounts are written off for production expenses or selling costs based on the actual cost of inventory items.
More information about the inventory rules:
Features of reflecting amounts on account 94
- Purchase of goods.
If a shortage or damage to products is detected at the time of receipt of goods from the supplier, the amount of the shortage within the limits provided for in the agreement with the supplier is displayed according to Dt94 in correspondence with Kt60. The amount of costs in excess of the agreed norm is recorded in Dt76 in correspondence with Kt60. If a court decision is made with a refusal to recover costs incurred by the supplier or freight forwarding company: the amounts included in debit 76 are transferred to Dt94.
- Those responsible for damage or shortage of products have been identified.
The difference between the amount billed for reimbursement from the employee and the amount included in debit 94 (actual cost of inventory and materials) is recorded in Kt98.4. In the process of reimbursement from the employee, the amounts are written off from the income account for the future period in correspondence with account 91.
- Costs from shortages or damage to inventory items from previous periods for which the perpetrators have been identified or there is a court decision to recover from the perpetrators.
The amount of the deficiency will be reflected: debit 94, credit 98 and at the same time debit 73, credit 94. During the reimbursement of the amounts, operations are carried out on the debit of account 98 and the credit of account 91.
Practical example.
An annual inventory was carried out at Solnyshko LLC. Based on the results of the audit, the following information was provided:
- absence of a machine, the initial cost of which was 63 thousand rubles, accrued depreciation - 23 thousand rubles;
- shortage of materials in storage warehouses within the limits of natural loss norms: total amount - 15 thousand rubles;
- cash discrepancy in the amount of 150 rubles.
Display of business transactions in accounting:
- Displaying the residual value of the machine on the loss account
Dt94 Kt01 - 40 thousand rubles
- Inventory shortage display
Dt94 Kt10 - 15 thousand rubles
- Cash mismatch
Dt94 Kt50 - 150 rubles.
- During the criminal trial, the person responsible for the missing machine was not identified
Dt91.2 Kt94 - 40 thousand rubles.
- The cost of missing inventories within the limits of natural loss norms was written off as production expenses
Dt20 Kt94 - 15 thousand rubles.
- The cashier was found guilty of a lack of cash
Dt73.2 Kt94 - 150 rubles
Analytical monitoring
Analytical monitoring of 94 accounts is not provided for in accounting.
Normative base
The use of account 94 to account for identified shortages or damage to inventory items is carried out in accordance with the current Chart of Accounts, approved by Order of the Ministry of Finance dated October 31, 2000 No. 94 and other legally approved documentation.
You can view the current chart of accounts.
Common postings according to account 94
- A shortage or damage was detected during the receipt of goods received from the supplier:
Dt94 Kt60 - within the limits specified in the contract;
Dt76 Kt60 - above the loss limits specified in the agreement with the supplier;
Dt94 Kt76 - in case of a court decision on the impossibility of collecting costs.
- A shortage is identified (for example, during an inventory):
Dt94 Kt01 - fixed assets (at residual value);
Dt94 Kt10 - material reserves;
Dt94 Kt41 - goods (at actual cost).
- Shortages or damage to inventory items were identified during the production process:
Dt94 Kt20 - for main production;
Dt94 Kt23.29 - for auxiliary or service production.
- Write-off of shortages within the limits of natural loss:
Dt94 Kt 20,23,29,44.
- Filing a claim for reimbursement of costs from the guilty party:
- Write-off of costs if it is impossible to identify the culprits:
- Write-off of costs when shortages or damage to products are recognized as extraordinary costs:
Companies engaged in commercial and industrial activities have losses, shortages of cash and inventory. These accounting transactions are formed on account 94 “Shortages and losses from damage to valuables.” In our article we will consider all situations regarding the count 94.
Separate accounting for UTII and simplified tax system
Companies have the right to maintain accounting records under several tax regimes. The taxable base for each special regime is calculated separately, and therefore there is a need to maintain separate accounting.
Causes of damage to inventory items
Changes in the amount of cash and quality of inventory items are identified as a result of:
- Inventory at the enterprise;
- Upon receipt of goods from the seller;
- When checking documents.
Any shortage, loss or damage is debited to account 94. Let us list the situations in which these changes occur:
- Inconsistency in the amount of valuables in the enterprise;
- Identification of damage or missing goods upon acceptance of goods from the seller;
- Damage caused as a result of storage of inventory items (standardized and non-standardized);
- Errors found in accounting.
Attribution of damage to the debit of account 94 depends on the type of main objects:
- Actual cost, if the quantitative indicator is damaged or missing;
- Actual damage if partially damaged.
- Main objects:
- The original cost minus depreciation, in the absence or complete damage;
- Actual damages if partially damaged.
- Actual losses, identification of the amount of actual losses.
You need to know that damage from emergency situations cannot be attributed to account 94.
Account 94 for Dt interacts with the following accounts:
Accounting operations according to Kt94
Amounts recorded in the debit of account 94 are subject to write-off. The table shows the accounts to which the amounts reflected in the debit of account 94 can be written off:
Actions required to close account 94
Before closing the “Shortages and losses from damage to valuables” account, the following operations must be carried out:
- Carrying out inventory of goods and materials and cash;
- Identification of the fact of shortage, damage or loss;
- Finding out the reasons - due to the fault of the employee, natural loss, contractual losses, force majeure;
- Attributing the amount of damage to the costs of the enterprise or to the culprit employee.
Postings for debiting from account 94 are shown in the table above.
An example of accounting for cash shortages in the cash register
When conducting an inventory of cash in the cash register at the enterprise, a shortage of 3,850 rubles was identified. Damage in accounting refers to account 94, which means that the accountant makes the following accounting entries:
- Dt94 Kt50.01 – 3850 rub. – the amount is attributed to the shortage at the cash register;
- Dt73.02 Kt94 – 3850 rub. – the damage is written off if the culprit is the cashier;
- Dt70 Kt73.02 – 3850 rub. – compensation for damage from the cashier’s salary.
If the culprit of the damage cannot be determined at the cash register, then the losses are attributed to non-operating expenses by posting:
- D91.02 Kt94
An example of accounting for damage normal and in excess of natural loss
An inventory carried out at the enterprise revealed spoilage of fruit in the amount of 1,560 rubles:
- 1000 rub. – natural losses;
- 560 rub. – damage in excess of the norm, compensated from the salary of the financially responsible person.
We create the following wiring:
- Dt94 Kt41 – 1560, damage to fruit during inspection;
- Dt44 Kt94 – 1000, damage is written off as sales costs according to the norm;
- Dt70 Kt94 – 560, the amount of damage in excess of the norm was reimbursed from the warehouseman’s salary.
If the organization has a reserve for future expenses, account 96, then the amount of damage within the limits of the natural loss rate is written off to this account. If account 96 is not provided, then the write-off of damage is attributed to the cost of production or goods (accounts 20,23,25,26,44).
An example of accounting for shortages when accepting goods
A trade organization was brought 100 kg of cabbage for sale in the amount of 1,500, including VAT 228.81. During unloading, missing goods were found in the amount of 15 kg in the amount of 225 rubles. Payment for the goods was received in advance from the buyer to the supplier. The supplier returned the money for the shortage of goods. We formalize transactions with the buyer using the following transactions:
- Dt60 Kt51 – 1500 rub. – prepayment for goods;
- Dt41 Kt60 – 1080.51 rub. – the goods are capitalized;
- Dt94 Kt41 – 225 rub. – a shortage of cabbage is reflected;
- Dt19 Kt60 — 194.49 rub. – VAT reflected;
- Dt68 Kt19 — 194.49 rub. – VAT is presented for deduction;
- Dt73.02 Kt94 — 225 rub. – the damage is written off to the supplier;
- Dt51 Kt73.02 – 225 rub. – refund from the supplier for missing goods.
Accounting for excess materials
If during the inventory of goods surplus products are identified, they are credited to the enterprise’s balance sheet using the following entries:
- Dt10, 41 Kt91.01, basis – inventory list.
Documents recording losses from damage, shortages
Any change in the organization is recorded in primary documents. This also applies to damage, damage, shortages and other causes of damage. At the same time, a commission is created from a representative of the organization, financially responsible persons who document the quantity and quality of goods, shortages, damage, scrap, etc.
If damaged goods are discovered, the commission is TORG-15 or TORG-16. These documents are transferred to the head of the enterprise to decide on the further use of the product. If the goods are unsuitable for further use, then the accountant attributes them to account 94. The act is drawn up in 2 copies: for the accountant and the financially responsible person.
How to take into account shortages and losses of material and other assets (including money) identified in the process of their procurement, storage or sale? For these purposes, the Chart of Accounts and the Instructions for its application provide for account 94 “Shortages and losses from damage to valuables” (Order of the Ministry of Finance dated October 31, 2000 No. 94n).
Accounting on account 94: reflection of shortages
Accounting account 94 is an active synthetic account, the debit of which reflects the shortage of valuables, and the credit reflects its write-off to a specific source of covering losses.
For example, if, as a result of a warehouse inventory, a shortage of goods and materials is revealed, the actual cost of such inventories is written off as a loss using the accounting entry:
Debit account 94 – Credit accounts 10 “Materials”, 41 “Goods”, 43 “Finished products”
And if a shortage was identified during a check of the cash register, then it is reflected in the same way: Debit account 94 – Credit account 50 “Cashier”
For missing or completely damaged fixed assets, the debit of account 94 is no longer their accounting value, but:
Debit account 94 – Credit account 01 “Fixed assets”
If shortages or damage to valuables are detected upon acceptance from the supplier, then, within the limits stipulated in the contract, such losses are reflected as follows:
Debit of account 94 – Credit of account 60 “Settlements with suppliers and contractors”
And losses in excess of the agreed amounts will be accounted for as follows: Debit account 94 – Credit account 76 “Settlements with various debtors and creditors”
Write-off of shortages and losses from account 94
Amounts reflected in the debit of account 94 are subject to write-off. In this case, the account debited will depend on the type of shortage, the reasons for its formation and sources of compensation for losses.
Thus, the write-off of shortages and damage to inventory items within the limits provided for in the contract, and if such losses are identified during the procurement of inventory items, are charged to the cost of the assets being procured:
Debit accounts 10, 41 – Credit account 94
If these losses are identified during the storage or sale of valuables, then:
- within the limits of natural loss norms, they are attributed to production costs or sales expenses: Debit of accounts 20 “Main production”, 26 “General business expenses”, 44 “Sales expenses” - Credit of account 94;
- in excess of the norms of natural loss - to the financial results of the organization as part of other expenses: Debit of account 91 “Other income and expenses” - Credit of account 94
Of course, if the culprit of the shortage is known, who is an employee of the organization, and the organization itself does not refuse to recover damages from such a person, the losses are attributed to him:
Debit account 73 “Settlements with personnel for other operations” - Credit account 94
In the event that not the actual cost of lost property is recovered from the guilty persons, but, for example, its market value, the difference between such value and the amount reflected in account 94 is taken into account as part of deferred income:
Debit of account 73 – Credit of account 98 “Deferred income”
As the deficiency is collected from the guilty person, the difference recorded in account 98 is transferred to other income: Debit of account 98 – Credit of account 91
Organizations? To answer, you must refer to Order No. 94n dated October 31, 2000, where it is determined that the account. 94 is intended to reflect identified shortages and/or losses of valuables. In this case, it is initially necessary to establish the fact of the shortage, and then attribute such amounts to the guilty persons (if they are identified) or to the expenses of the enterprise. Let's look at how to close account 94 - postings for typical transactions are given below.
Features of accounting for shortages and losses from damage to inventory items
Cases of shortage of property and monetary resources of a company are not uncommon and are most often identified during inventory activities. In addition, shortfalls in inventories are possible when supplies are delivered from suppliers, due to natural wastage, as well as due to force majeure.
To reflect aggregate data regarding losses of company property, a special active account 94 is used. On the debit side, the amounts of shortfalls are formed in correspondence with the inventory accounts, and on the credit account 94 is closed in the amount of:
- Shortages/losses according to the amounts stipulated by the contractual terms - when purchasing inventories.
- Shortages/losses within the established norms of natural loss - in the process of storage and/or sale of inventories.
- Shortages/losses in excess of the established norms of natural loss - with identification of those responsible for the theft.
- Shortages/losses in excess of the established norms of natural loss - without identifying the perpetrators of the theft or when it is impossible to prove the fact of guilt.
How to close account 94
Reliable closure of account 94 is carried out with a loan in a monetary amount and quantitative value corresponding to the values accepted for accounting as a debit of the same account. And the cost accounts corresponding to the enterprise's industry are written off at the actual cost of material assets. When collecting amounts of theft from guilty employees of the organization, accounts 73 and are used.
Closing 94 accounts – postings
Let's look at examples of how to close a 94 account. The most typical situation is the identification of shortages during inventory. Let’s assume that the inventory commission has discovered shortages in fixed assets, equipment, materials, goods, finished products, and products of main production (unfinished, servicing):
- D 94 K 01, 07, 10, 41, 43, 20, 23, 29 – for the amount of shortfalls.
- D 20 (29, 23) K 94 - reflects the write-off of the shortage to the costs of the main (service, auxiliary) production.
- D 73 K 94 – reflects the write-off of the shortage to the guilty employee.
- D 91 K 94 - reflects the write-off of the shortage for other expenses of the company in the absence of the culprit.
- D 99 K 94 – reflects the write-off of the shortage due to emergency circumstances.
Closing account 94 at the end of the year - postings using an example
Torg-opt LLC conducted an inventory in December, which resulted in a shortage of materials in the amount of 5,700 rubles, and goods in the amount of 4,800 rubles. After an investigation, the company administration identified the culprit - employee Ivanov I.I. The cost of the goods is deducted from his salary. Postings:
- D 94 K 10 for 5700 rub. – a shortage of materials is reflected.
- D 94 K 41 for 4800 rub. – a shortage of goods is reflected.
- D 73 K 94 for 10,500 rubles. – attributed to Ivanov I.I. amount of shortfall.
- D 70 K 73 for 10,500 rubles. – the amount of the shortfall was withheld from Ivanov I.I.’s salary.
- D 98 K 91.1 for 10,500 rubles. – the amount of damage recovered from the employee is included in other income.
Note! In 1C, when closing 94 accounts at the end of the period, the corresponding entry is generated manually by the accountant through a work entry in the transaction journal.
