You’ve got a backroom of stock that falls into two piles: the half that’s water-damaged or expired and will never sell, and the half that’s fine but just won’t move at full price. One of those is a write-off. The other is a write-down. Use the wrong one and you either throw away recoverable dollars or overstate what your inventory is actually worth. The difference isn’t accounting trivia. It changes the entry you record, how the loss is treated at tax time, and what the loss is quietly telling you about your buying. Here’s the decision, the exact journal entries, and
