Created with Sketch.Learn about PPP and Loan Forgiveness, stay informed with the latest changes.
Created with Sketch.Questions about how to close your books for 2020? Visit our Year End Resources page.
Created with Sketch.New to QuickBooks or using a new product? Visit our Get Started resource page to help you get going.
Created with Sketch.Need to make changes to your account? Visit the Account Manager Portal.
cancel
Showing results for 
Search instead for 
Did you mean: 
Level 1

Negative Inventory on an item with $0.00 Average Cost - Implications

Scenario #1 - I am aware of the problems of showing Negative Inventory in quickbooks.  However, does it still create problems if that Negative inventory is on items with a $0.00 average cost?  Example: employee cleaning out 40 year old facility and finds aproximately100 widgets.  Inventory item is created with $0.00 average cost.  ($0 Average cost because there is no expense or records to be found.)  Inventory is sold, and at the end of the year we show sales of 150 widgets sold.  (Negative inventory of 50 showing.)

 

  At the end of year inventory, is there any problem making an inventory adjustment to quantity on hand and zeroing out that negative inventory.

 

I realize all 150 units sold are showing as 100% profit, as they should, as there was no cost.  My question is: am I creating problems or issues within quickbooks by doing this?

 

 

Solved
Best answer April 22, 2019

Best Answers
Level 15

Negative Inventory on an item with $0.00 Average Cost - Implications

Do an inventory adjust, set the adjusting account to COGS or better a sub account of COGS called shrinkage, and increase the qty so that there is zero on hand

 

BEFORE you save, look at the bottom right, if the value is zero save it, if not back out of the adjustment and let me know what the value was.

View solution in original post

3 Comments
Level 15

Negative Inventory on an item with $0.00 Average Cost - Implications

Do an inventory adjust, set the adjusting account to COGS or better a sub account of COGS called shrinkage, and increase the qty so that there is zero on hand

 

BEFORE you save, look at the bottom right, if the value is zero save it, if not back out of the adjustment and let me know what the value was.

View solution in original post

Level 1

Negative Inventory on an item with $0.00 Average Cost - Implications

Correct, I have the Adjustment account set to a COGS account.  Adjusting value at bottom of screen is $0.00, so I believe this should work....  Thank you for the support.

Level 15

Negative Inventory on an item with $0.00 Average Cost - Implications

Curious though, did you ask how you sold 50 of something you did not have and still got paid?

 

That is one hell of a business plan or salesman

:-)

 

Need to get in touch?

Contact us