Fixing wrong Products and Services

You have to check the Also update this account in historical transactions option to apply changes to past invoices, Playawest45.

The reason your invoices still display merchandise sales instead of service income, despite updating your Products and services, is that changes are not automatically applied to historical transactions. To apply these changes, you have check the Also update this account in historical transactions option.

Since the changes have already been saved in your Products and services settings, this option will appear unavailable. To resolve this, temporarily assign the income account to another account and save it.

Once done, you can edit the Income account again and assign it to the correct account. Then, check the Also update this account in the historical transaction option to ensure the changes are applied to historical transactions.

Here’s how:

1. Go to Sales and Get Paid and select Products and Services.
   
2. Locate the product and click Edit.
3. In the Sales section, click the Income account dropdown.
4. Select the correct account.
   
5. Tick the box to check the Also update this account in the historical transactions option.
6. Click Save.

For more details about changing the income account for a product or service item, refer to this article: Change the account for a product or service item.

Feel free to reach out if you need further assistance or clarification.

In QuickBooks Online (QBO), you can only use the Also update this account in historical option when changing a non-inventory or service item, Playawest45.

With regards to your question, if an item has its income or expense account adjusted, it will be retroactive to previous transactions, then it depends on whether it is a service and non-inventory items or inventory items.

For service and non-inventory items, we have the option to select the Also update this account in the historical transactions checkbox after the step. This updates all transactions that use the item. However, for inventory items, the checkbox doesn’t appear.

But, for inventory items, the checkbox doesn’t appear this is because inventory items track quantities on hand using First In, First Out (FIFO). FIFO affects your assets and Cost of Sale (COS) differently from service and non-inventory items. 

Also, you can check this article on how to change the income account for inventory items, just proceed to the steps provided in this article: Change the account for a product or service item.

Feel free to reach out anytime if you need further assistance or have questions about products and services.