I had noticed when I was adding inventory it was going to Inventory shrinkage. How do I go about changing it back from the inventory shrinkage to the inventory Asset

It’s nice to see you today, randstrailersale.

I want to ensure you’ll be able to switch the Inventory shrinkage to Inventory Asset when adding inventory.

When adding a new inventory in QuickBooks Online, the default accounts used to track it are Inventory asset account, Income account, and Expense account. Inventory Shrinkage will only show if you’re adjusting the quantity.

If this is the case, you’ll be able to switch it back to Inventory Asset by clicking on the drop-down and then selecting the account. I also added article to help give you a better idea about inventory:

• How to set up Inventory and tracking
• How to adjust inventory quantity on hand

However, if this isn’t the issue you’re experiencing, I appreciate additional details to help me get on the same page. Thanks in advance.

@randstrailersale

NO

do not ever use inventory asset in a purchase, a journal entry, or an adjustment - doing so messes up inventory valuation on the balance sheet compared to item valuation.

Why are you increasing inventory using an adjustment?

the only time you might do this is after a 100% physical inventory and you find some on hand that you did not know about.  IF, if that is the case, then yes, using inventory shrinkage is the correct account for the inventory adjust that increases qty on hand.

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@Rasa-LilaM wrote:

 

 Inventory Shrinkage will only show if you’re adjusting the quantity.

If this is the case, you’ll be able to switch it back to Inventory Asset by clicking on the drop-down and then selecting the account. 

 

If it is the case that you’re adjusting the quantity then Inventory Shrinkage is correct