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A
Adele24
January 9, 2023
Question

Beginning inventory

  • January 9, 2023
  • 1 reply
  • 1 view

Good afternoon,

I started using QB Enterprise Desktop last year.  I was unable to put in a beginning quantity of inventory on hand since I couldn't export it from my old system, but I did have my inventory valuation in my chart of accounts.

 

As I made my assemblies and started my builds, I had to adjust my quantities on hand to build, since I had no inventory on hand showing .  The problem is that every time I adjusted the quantities, it increased my inventory values in my chart of account, sort of like double counting.  These parts were already accounted for in my inventory valuation.  My inventory has now doubled in value because of the adjustments needed to do the builds.

 

How can I bring my inventory back to where it needs to be, since the inventory was not new and already in my books, without it affecting my retained earnings or throwing off my chart of accounts?

1 reply

JessT
JessTModerator
Moderator
January 9, 2023

Hello Adele!

 

Thank you for posting here today. I can assist you in correcting your inventory records, so you can create assemblies without double-counting the valuation.

 

In general, the value of inventory or assets is calculated by multiplying the quantity on hand by the average cost per item. It seems that you've entered a balance in your Inventory Asset account because you were unable to import the quantity details. This can lead to incorrect valuation. Therefore, you'll want to delete the beginning balance transaction in the Inventory Asset account, causing the valuation, and only keep the quantity adjustments in your records.

 

On the other hand, if the costs of the items have changed in the past, you'll want to delete the inventory adjustments and enter the item's purchase transactions. This way, QB will calculate the valuation based on the average cost rather than the cost in the item list. Then, do additional adjustments to add the remaining quantities of each item.

 

I recommend backing up your company file before we begin, just in case any issues arise during the process. Then, check your inventory reports as you delete or add transactions so you can closely monitor the values.

 

To delete the beginning balance of the Inventory Asset account:

 

  1. From the Lists menu, select Chart of Accounts.
  2. Right-click on Inventory Asset and click QuickReport: [asset name] at the bottom.
  3. Change the date range to All and click Refresh.
  4. Find the very first transaction, which is usually a Deposit with a memo "Account Opening Balance".
  5. Double-click the transaction to open it.
  6. Click the Edit menu and choose Delete deposit, or just press Ctrl+D.

 

In case you need to delete the quantity adjustments, follow these steps:

 

  1. Go to the Lists menu and choose Item List.
  2. Right-click an inventory item and click QuickReport: [item name].
  3. Find and double-click the adjustment transactions and press Ctrl+D.

 

Feel free to go back to this thread if you have more questions about correcting your inventories. Take care and have a good one!

A
Adele24Author
January 10, 2023

Thank you for your reply.  However, if I delete my original asset journal entry, then wouldn't my original general journal entry be out of balance?  

 

I've thought about doing this, but then I would have to adjust the balance to retained earning, and it would increase my retained earning balance incorrectly.

R
Rasa-LilaMQuickBooks Team
QuickBooks Team
January 10, 2023

Thank you for returning to the Community and providing more information about your inventory issue, Adele24. The data will help us determine the actions we should take to maintain the accuracy of your record.

 

The desktop program updates inventory quantities and value as you track every purchase and sale. If the inventory status is inaccurate, you can either modify the quantity on hand or the total value.

 

Since the quantity of items increases when creating an adjustment, I'd suggest consulting an accountant for guidance on how to properly handle the situation. This is to prevent throwing off your records, particularly your asset account and retained earnings.

 

For further information on when to change the quantity or value of your inventory, click here for the complete details. Also, these links contain topics, tips, and resources to assist you in managing your accounting tasks as well as your inventory data efficiently:

 


Reach out to me again if you have other inventory concerns or questions about the product. I'd be delighted to assist you further, Adele24.

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