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Join nowHi,
I'm trying to understand how FIFO works in QB.
I ran into a following scenario and I hope someone could help me understand it.
I create an inventory with starting value of Qty = 10 and Cost = 5.
Then I create a bill on the same date with Qty = 10 and Cost = 6.
and I create an invoice with Qty = 15.
I ran an "Inventory Valuation Detail" report and it look something like this.
It look correct to me.
Transaction Type | Qty | Rate | FIFO Cost |
Inventory Starting Value | 10 | 5 | 50 |
Bill #1 | 10 | 6 | 60 |
Invoice #1 | -10 | 5 | -50 |
Invoice #1 | -5 | 6 | -30 |
But as I go back to Bill #1 and change the Qty from 10 to 20.
I ran the "Inventory Valuation Detail" report again and it look something like this.
It doesn't look correct to me.
Transaction Type | Qty | Rate | FIFO Cost |
Inventory Starting Value | 10 | 5 | 50 |
Bill #1 | 20 | 6 | 120 |
Invoice #1 | -15 | 6 | -90 |
As you can see the Invoice #1 now use all item with Rate = 6.
I expected to see it use 10 Qty with Rate = 5 and another 5 Qty with Rate = 6.
Can someone help me understand how FIFO work in this scenario?
Solved! Go to Solution.