Zero cost vs 100% discount on PO

neelyneely Member Posts: 1

Hi! When accounting for an item that is delivered to us free of charge (gift with purchase for example) is it "better" to use zero cost for the item on the PO or the 100% discount (assuming we create a new PO for the free item). Just wondering how it affects inventory costs etc. If there is a "right" way?

1 comment

  • VanessaDVanessaD Moderator, Lightspeed Staff Posts: 714 moderator

    Hey @neely

    It's honestly the same in either case. I ran some tests and received 2 products via 2 sepearate POs (1 for the items received and 1 for the freebie), then discounted one at 100% off and the other, I simply put the cost at 0$.


    They came out the same via the Average cost calculation since the discount simply does the same to the cost, by dropping it down to 0$. At this point, it's more or less up to your accountant to decide which method they prefer seeing in your accounting software.

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