It really depends on your business and whether you need to sytematically track the damaged goods.  I was a Supply Chain Director when using Acumatica and we simply did not receive the goods if they arrived damaged and were planning to receive replacement goods.  That is the simplest way if you don’t need to track them within Acumatica.  If you do need to track them, you can receive them to an ‘Inspection’ or ‘QC’ warehouse location where the settings are such that it is not available inventory, and then return them.  That will give you a full transaction history on the damaged goods, but again, it depends on the needs of your business.  The simplest way is to not receive them and wait until they are replaced.

Thank you that was super helpful!