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Products and Services 'Starting value' causing duplication in Stock Asset account

We've set up a year of accounts in QBO using Opening Balances supplied by our accountant and entered as a Debit/Credit journal entry. This includes Bank balances, Loans - and Stock at hand for the start of that financial year.

The stock value we entered shows up on the Balance Sheet in the Stock Asset account as expected - so far, so good.

We've now set up our Products in QBO and given them starting quantities and values - which also match the opening balance figures and QBO is correctly putting this stock value into the Stock Assets account as expected.

 

The problem is we now have 2x stock values in the Stock Asset account - we have the value from the original Opening Balance journal entry and the value from the new QBO stock control system - so we're showing a Stock at hand value that is twice what it should be 

 

How do I get round this?

 

I can't delete a single line on a multi-line journal entry (in the opening balances) - it won't balance and it won't let me save it if it doesn't balance.

I've spoken to QBO support twice today - they are normally very helpful - but neither of the people I spoke to had any idea how to get round this issue. 


Please help! Thanks in advance.

Solved
Best answer 04-05-2019

Accepted Solutions
Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account

@ID362807 

to fix this

 

journal entry

debit opening balance equity for the amount in the journal entry

credit inventory asset for the same amount

 

as it stands now

you debited inventory asset with journal entry

you create items with cost and qty, that debited inventory asset and credited OBE

 

so if you take the value out of inventory asset using a credit, and post it to OBE, that cancels the amounts and the balance sheet will be correct

 

going forward, think of inventory asset as a summing account, and think of each item as a sub account where cost and qty are kept.  You can Never use inventory asset in a journal entry, an adjustment or a purchase - if you do you change the balance sheet amount but do NOT affect item cost.  That means the balance sheet value for inventory asset will not equal the inventory valuation summary report, and it must.

 

Journal entries should be the exception when using QB, they often do not work as you think they should, and  when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used.    Journal entries also bypass accrual/cash reporting, and will not show on many reports.

6 REPLIES 6
Moderator

Re: Products and Services 'Starting value' causing duplication in Stock Asset account

It's good to see you here in the Intuit Community, abstractjuz,

 

I appreciate you providing detailed information.

 

The duplication of the stock values on the Stock Asset account is because of the Journal Entry made. Since you’ve set up your product and entered starting quantities and values, you no longer need to create a Journal entry.

 

To resolve the problem, you can delete the line for Stock Asset in the journal entry made and then adjust the credit amount to be reduced by the amount of stock asset that is being remove so the entry would be balance.

 

That's it! If you have further questions, please feel free to visit us again. Have a great day!

Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account


@MirriamM wrote:

 

 

 

To resolve the problem, you can delete the line for Stock Asset in the journal entry made and then adjust the credit amount to be reduced by the amount of stock asset that is being remove so the entry would be balance.

 

 


This does not mention the use of the Opening Balance Equity account

It s/be Opening Balance Equity, and it may be a debit or credit that gets adjusted

 

Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account


@ID362807 wrote:

We've set up a year of accounts in QBO using Opening Balances supplied by our accountant and entered as a Debit/Credit journal entry. This includes Bank balances, Loans - and Stock at hand for the start of that financial year.

 

 


The journal entry should not include any totals for accounts that have sub-ledgers, i.e. Accounts Receivable, Accounts Payable and Inventory.  The offset to to make up for these totals s/be posted to the Opening Balance Equity account

 

If you enter a Qty > 0 and a Cost in the item set-up screen a transaction is created that increases the inventory asset account by Qty x Cost, and offsets it to Opening Balance Equity, which is an account that should have a zero balance.  It should only be used as a clearing account when setting up new books for an existing business. After that it should never be used again. For that reason, you should always enter a Qty of 0 in the item set-up screen for new inventory items, once the books are set up.  

 

 

Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account

@ID362807 

to fix this

 

journal entry

debit opening balance equity for the amount in the journal entry

credit inventory asset for the same amount

 

as it stands now

you debited inventory asset with journal entry

you create items with cost and qty, that debited inventory asset and credited OBE

 

so if you take the value out of inventory asset using a credit, and post it to OBE, that cancels the amounts and the balance sheet will be correct

 

going forward, think of inventory asset as a summing account, and think of each item as a sub account where cost and qty are kept.  You can Never use inventory asset in a journal entry, an adjustment or a purchase - if you do you change the balance sheet amount but do NOT affect item cost.  That means the balance sheet value for inventory asset will not equal the inventory valuation summary report, and it must.

 

Journal entries should be the exception when using QB, they often do not work as you think they should, and  when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used.    Journal entries also bypass accrual/cash reporting, and will not show on many reports.

Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account


@Rustler wrote:

@ID362807 

 

You can Never use inventory asset in a journal entry

 


I agree, and yet you suggest doing just that. 

That is why I said The journal entry should not include any totals for accounts that have sub-ledgers, i.e. Accounts Receivable, Accounts Payable and Inventory.  

 

So to fix this simply delete the line in the JE with inventory asset, and adjust the offset to OBE, and amazingly that is also what the QuickBooks Team member kind of said

Established Community Backer ***

Re: Products and Services 'Starting value' causing duplication in Stock Asset account

malcolm

 

In normal operations my statement is true

 

I suggest using a journal entry to reverse the one originally made,

Use some T accounts to work it out.

Editing and changing historical entries is bad form.  On top of that you do not know if this issue is from this fiscal year or not.