QBO Beginning Inventory vs. Inventory Asset

Hello there, LPD1.

We can't delete a journal entry that is created for that inventory account. You can make another journal entry to offset these inventory amounts. However, you'll need to consult an accountant to get more help with identifying which account to select.

You can always get back to the Community if you have other questions.

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@LPD1 wrote:

I am using QBO.  Accountant previously set up inventory amount as a "beginning inventory" figure under current assets because I was not tracking inventory in QBO at that time. They then made a journal entry at the end of each year to account for increase or shrinkage, which gave me an accurate inventory number on my balance sheet.

 

Beginning 2018, inventory is properly recorded in QBO and shows under Inventory Asset. Now "total other current assets" is reflecting beginning inventory plus inventory asset.  How do I correct this so my assets are propery reflected?  I basically need to only count my inventory asset number to be correct on my reports and taxes.  Hope I wasn't too unclear.

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IF, if when you changed to inventory items, you started with new items and new purchases of those items, fixing this is fairly easy.  In other words items already on hand were not included

BUT, if when you started with inventory items and you used a starting count/cost for items you already had in stock - that changes things.

So which was was it?

I"m not sure what you mean by "new items".  I don't have that many inventory items so I can manually go in and fix anything I need to.  I'm guessing I didn't do it correctly or perhaps I wouldn't be in this predicament on my balance sheet? 

When you created your inventory items did you enter a starting quantity and cost? If so then the offset went to Opening Balance Equity. Is there a balance in that account?  If so, it should agree to whatever the accountant entered at 12/31/17, if you entered the starting quantity at 1/1/18. A Journal Entry would fix that, to set off one against the other.

Or did you leave the starting quantity at zero?

Hi there, @LPD1!

You can create an Inventory Quantity Adjustment transaction to correct your Balance Sheet report.

Here's how:

1. Go to the Plus icon.
2. Under Other, click Inventory Qty Adjustment.
3. Enter information as needed such as the date and the item.
4. Under Inventory adjustment account drop-down menu, choose the inventory account.
5. Click Save and close.

Once done, inventory count will be adjusted accordingly.

I've attached an article you can read to learn more about inventory adjustment: How to Adjust Inventory Quantity On Hand?

However, I still recommend contacting your accountant. He/she has the tool to adjust the inventory values and will give you more details about the content of your Balance Sheet report.

Feel free to leave a comment below if you have any other questions. I'll be your hand to help.

It does show as Starting under Opening Balance Equity.  The amount in Opening Balance Equity does not match my current inventory number or the previous inventory number put in by the accountant.  

My Opening Balance Equity account matches Inventory Asset number as of the end of 12/31/2018.  

Where did you get the quantity and cost from to enter the starting inventory, and at what date?

The amount in the Beginning Inventory account was an amount from a manual excel spreadsheet, which is where inventory had been tracking.  An amount was just being entered there and changed as necessary.  As of 1/1/2018, I loaded all parts info into QB and have kept actual inventory in there.  So I have the "left over" beginning inventory amount (which is no longer a good number) and I have the actual, correct inventory number in the Inventory Asset account.  So, it's adding the two numbers together, when I just need to remove the beginning inventory amount and just use the inventory asset amount.  I'm not sure if I've made myself very clear.  

I have the same exact issue.  I have yet to find someone that has the answer and calling Quickbooks is usually a waste of time.  If I find the answer I will post it :)  good luck!

If the inventory was sold through sales to your customers during the time you were not keeping track of inventory in Quickbooks, that would mean that your invoices to your customers were more generalized in the product/service and not actually reducing any inventory (since it wasn't in there) nor crediting cost of goods sold GL account, only adding to your sales account.  Your accountant was probably making an adjusting entry (like mine did) when you added in the manual inventory numbers at the end of year, via excel spreadsheet, to your beginning asset account and also they would have offset it to your cost of goods sold account through a JE.  In our case, our beginning asset numbers really have been sold to customers but not indicated through our customer invoices since we were not tracking inventory so cost of goods sold was not being adjusted when sales occured as it should have been.  So I would do an Journal Entry to move the beginning asset balance and offset it to cost of goods sold and well document it in your description.  Double check this with your accountant though.  I am not an accountant.  Just 10 years experience with QB.