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How Does Quick Books calculate value of Inventory to include in the balance sheet

Hello, I recently did an inventory  quantity adjustment for my inventory however when i run my items report the inventory value is higher than what is shown in my balance sheet. I have inventory from the previous period before i got quickbooks which i entered in the system with their quantity and value through a stock adjust. Could this be the reason why my stock value in the balance sheet is low?

Best answer 04-11-2019 12:44 AM

Accepted Solutions
QuickBooks Team

Re: How Does Quick Books calculate value of Inventory to include in the balance sheet

Hi there, Rodney2!

 

It depends on the adjustment account you choose. Since this is an increase on the quantity, this should also increase the value of your inventory asset account in the Balance Sheet.

 

The account you will use for this adjustment should be Opening Balance Equity. If you notice when you create an inventory item, and you put a quantity on hand, the inventory value will automatically post to your opening balance equity account. At the same time, the amount of inventory asset account increases.

 

Thus, you'll want to edit your stock adjustment and select the mentioned account as shown in the screenshot.

 

 

After this, you can run your Balance Sheet report.

 

Please go back to this thread if you have other questions. Thanks!

2 REPLIES 2
QuickBooks Team

Re: How Does Quick Books calculate value of Inventory to include in the balance sheet

Hi there, Rodney2!

 

It depends on the adjustment account you choose. Since this is an increase on the quantity, this should also increase the value of your inventory asset account in the Balance Sheet.

 

The account you will use for this adjustment should be Opening Balance Equity. If you notice when you create an inventory item, and you put a quantity on hand, the inventory value will automatically post to your opening balance equity account. At the same time, the amount of inventory asset account increases.

 

Thus, you'll want to edit your stock adjustment and select the mentioned account as shown in the screenshot.

 

 

After this, you can run your Balance Sheet report.

 

Please go back to this thread if you have other questions. Thanks!

Community Contributor *

Re: How Does Quick Books calculate value of Inventory to include in the balance sheet

Thank You Jess,

 

I changed the account and the figure automatically reconciled. I appreciate.