How to account for donated products (retail business)?

[JetCityWoman]

Hi there, I have an online retail business and occasionally donate a product to charities as a PR/goodwill gesture (and also ideally to drum up new business). I don't know how to properly account for those donations in my books. When I buy the products from the distributer, I log them in as cost of goods sold (wholesale purchases). Later, when I donate an item, is it an expense? Should I record it under my advertising/promotional account? Or something similar? Or something completely different?

 

[Pauljeon]

As far as i know, you should definitely record that under expense account.

 

[JetCityWoman]

Okay, so... is there a GAAP practice advising that it should go into any particular expense account?

 

[Tyson]

This CPA used an expense account called "Donations". See this article:

https://troutlakegroup.com/2012/11/01/how-do-i-account-for-the-donation-of-inventory-by-my-business/