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bfpierce999
Level 2

Deleted inventory

Hi all, I inherited a set of non-profit financials in QB. Our non-profit runs a bookstore.  After cleaning up the financials, I did an inventory audit.  We are missing a whole bunch of books and I want to remove them from the financials so that my inventory is correct.  However, when I tried to update the inventory, roughly $6k worth, my balance sheet no longer balanced.  It was off by roughly $300.  As a stop gap, I eliminated the inventory but set the transaction 10 years in the future.  That is not ideal because my balance sheet today is overstating my inventory by $6k or so.  The inventory I want to eliminate was added a few books at a time over the course of 10 years, so tracking everything down on an historical basis is nearly impossible.  What should I do?  If this were excel, I would just hard code the adjustment and move on.  I don't know how to create a one sided adjustment in QB however.

8 Comments 8
DivinaMercy_N
Moderator

Deleted inventory

I want to ensure this will be taken care of, @bfpierce999.

 

Since this involves past transactions, I would recommend reaching out to your accountant to help you in fixing the Balance Sheet. This way, we can ensure that everything is accurate and avoid messing up your books. If you're not affiliated with one, you can use our Find an Accountant tool to look for one near your area. 

 

Meanwhile, you may want to check these articles for insights and guides on how you can fix your Balance Sheet:

 

Also, when performing any troubleshooting steps to fix your books in QuickBooks Desktop for Mac, we recommend creating a backup copy of your file first. This is to make sure that you always have the original data that you can restore in case of accidental loss or damage.  

 

I'm just around the corner to help if you have any other concerns about your inventory or balance sheet. Feel free to post again here. Have a good one. 

Rainflurry
Level 13

Deleted inventory

@bfpierce999 

 

I assume you determined inventory was short $6K by taking a physical inventory? 

 

Did you then adjust the item quantities in QB or are you not tracking inventory items in QB? 

 

Any adjustment to lower inventory (credit) is going to require a debit entry to offset it, which is generally cost of goods sold.   

bfpierce999
Level 2

Deleted inventory

yes, took a physical inventory.  these books are not there.  tested one of these......

 

If i open transaction center, the value of a single inventory adjustment on the amount line is 291.65.  when i click into the transaction, the total value of adjustment at bottom is 269.73.  the error/difference in the balance sheet is 21.92, the difference between these two numbers.

 

it gets weirder.  when i post this transaction to today so that it hits my current balance sheet, my total assets fall by 274.73 and my total equity/liabilities fall by 296.65.  the difference is still 21.92, but the gross numbers are different again.  any thoughts?

Rainflurry
Level 13

Deleted inventory

@bfpierce999 

 

It sounds like the difference is due to the average cost.  Are these books that have been reordered over many years?  As the cost changes over time, QB recalculates the average cost of the item but apparently does not make inventory adjustments based on the average cost.  Maybe you have seen this step on doing a value adjustment when adjusting your inventory in QB for Mac:

 

If you need to, edit the value of the inventory after adjusting the quantity. QuickBooks will recalculate the value based on average cost. When you edit a value, you change the average cost of the items in stock. To edit the value, select the Value Adjustment checkbox. In the New Value column, enter the value for each inventory item whose value you want to change

 

The other option is that if you know your quantities are accurate and we are talking an immaterial dollar amount ($600, right?), you can make a journal entry to adjust this.  If you need to reduce inventory in QB, debit cost of goods sold, credit inventory.  If you need to decrease inventory in QB, debit cost of goods sold, credit inventory.

 

 

 

bfpierce999
Level 2

Deleted inventory

I tried the second option.  The problem is that the general ledger has a credit and debit that are equal.  I'm trying to put in one that is not equal.  The reason for this is when I reduce the inventory, my balance sheet no longer balances.

 

I tried the first option and it doesn't give me the option to enter a "New Value" when I check that box.  It shows a grayed out value that I can't edit.

Rainflurry
Level 13

Deleted inventory

@bfpierce999 

 

Yes, debits and credits must always be equal.  That's the foundation of double-entry accounting so making an unequal journal entry is not a thing.  So, your balance sheet must have been out of balance before the journal entry, correct?  Unfortunately, an unbalanced balance sheet is a separate issue and there are many tutorials on how to address that issue.  I'm afraid I can't help with that one. 

 

 

bfpierce999
Level 2

Deleted inventory

No, that is the whole point. My balance sheet is balanced right now. I enter the inventory adjustment and it goes OUT of balance. 

bfpierce999
Level 2

Deleted inventory

This has happened to me again.  I adjust the inventory I have and my balance sheet no longer balances.  I don't want to rebuild the file and I don't want to look through 20 years of book purchases.  It is a non-profit and it doesn't matter.  How do I force and increase to shareholder equity without an offsetting asset increase?

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