Inventory

Inventory is held as an asset and is perpetual.  I carries forward from year to year.

There are no problems with buying it in one year and selling it in another.

Then why does QB say it will mess up the tax returns? See screen shot attached. Im very confused.

Hello, Kathy. 

Thanks for getting back to us, and I'd like to help you with the "QuickBooks lets you do this.." message prompt when entering your transactions.

As what Rustler mentioned, the inventory is carried forward, and it doesn't cause any issues if we sell it to the next year. 

Now looking at the screenshot, that message appears if we enter a transaction in a closed accounting period. There are several things to consider when dealing with this message prompt. 

We'll want to ensure that the bill date or the transaction date doesn't fall under a closed accounting period. So, let's change the date by selecting the correct one on the Date drop-down menu. 

Also, another trigger for this message is that the computer's date doesn't match with the current date.

This happens if we're working on a multi-user setup, and the workstation has a different date format. QuickBooks follows the computer date for transaction entry. 

In this case, let's change the date on the computer or on the workstation. Then, enter the transactions again. 

However if the date on the bill is not supposed to be closed yet, we can edit the closing date in QuickBooks: 

1. Go to Edit, then select Preferences. 
2. Click the Accounting tab. 
3. Go to Company Preferences. 
4. Under CLOSING DATE, click the Set Date/Password button.
5. Remove or Edit the date, then hit OK.

Enter the transaction for your sale normally. If we removed the date, set it again by going the Preferences menu. 

Also, another thing to consider. Are we trying to enter some corrections on a closed accounting period? We'd want to check with an accounting professional when doing this process.

They'll ensure the current account balances are correct as they enter the corrections. 

More details about the message prompt can be found here: Set or change a closing date and closing date password.

Need to check your financials after recording the transactions and other entries? We can utilize the Reports feature to see the data and the numbers. This article might come in handy in case we need help with a specific report: Understand reports.

Would you like some assistance on recording your other vendor or sale transactions? Or do you need help with a specific report? Let me know and I'll help you out. 

My accountant does not recommend chagning the closing date, so Ill just check in with him and see what he recommends. Thansk for the input.

Hi there, @KathyP1964.

Yes, it would be best to follow your accountant's advice. They are the experts on what's best for your business.

Feel free to visit us again if you have further concerns. We're always here to help.