Changing the asset value on an item that was entered incorrectly in a previous year

Thanks for posting in the Community space, @RLSS.

You can create a journal entry to zero out the amount of that inventory item. This way, it will balance your Inventory Valuation Summary and General Ledger. Let me guide you how:

1. Click the +New icon, then select Other.
2. Select Journal Entry.
3. Fill out the fields to create your journal entry.
4. Select Save and new or Save and close.

Also, once you zero out the inventory item it will not affect your historical transactions in QuickBooks.

However, I'd suggest consulting an accountant to help and guide on which account to debit and credit. Your accountant can provide more expert ways of dealing with this situation.

For more details, see this article: Create a journal entry in QuickBooks Online.

In case you need an additional reference about what you can adjust, I'm adding the article below: Adjust inventory quantity or value.

Also, you can run inventory-related reports in QBO. Simply go to the Reports menu, and then refer to the Sales and customers section.

Feel free to leave a comment below if you have other questions in mind. I'll be sure to get back to you. 

Thank you for the information. 

I suppose my question is, what happens when you make an inventory item inactive? Because when I do that, it changes the Inventory Valuation in all previous periods. 

Is there no way of making a product inactive without it affecting the value in previous periods?

Thanks for your help!

Hello again, @RLSS.

Once you inactivate an item in QuickBooks Online (QBO), it won't affect historical transactions. But before doing so, ensure first the item has zero quantity. If the item has quantity when making it inactive, you'll need to adjust, then make inactive.

To adjust Inventory Quantity to zero, here's how:

1. Click the Gear icon at the top. 
2. Under Lists, choose Products and services.
3. Locate the item.
4. Under the ACTION column, click the drop-down arrow and select Adjust quantity.
5. Make the new Quantity to zero.
6. Pick Save and close. 

You can check the Adjust inventory quantity or value for more information.

Additionally, to know more about modifying the products and services in QBO, see this link: Remove or merge a product or service.

Let me know if you have any other concerns. I’m always ready to answer them for you. Have a good one.

I have a min. of three items that have a negative Asset Value. 

Two of the items have Zero inventory, therefore they should have a zero asset value. see attached, they have a negative asset value. 

The other items has a qty of 2035, should have an asset value of 0.25, with a Calc. Ave of $508.75, see attached.

Once these three asset value are fixed, how do I check to make sure other items have the correct asset value and calc. avg.?

Meredith