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stevepettit72
Level 1

If I forgot to enter an inventory adjustment for end of '20, what should I do now?

If I enter the adjustment as of the end of '20, will it mess up the '20 results? The correct inventory amount was used on the IRS tax form, but it never was entered into QB properly.
2 Comments 2
Kurt_M
QuickBooks Team

If I forgot to enter an inventory adjustment for end of '20, what should I do now?

Hi there, @stevepettit72.  I'll share some information about your query.

 

Since you've already filed your 2020 IRS tax form, I suggest avoiding any inventory adjustments. It can mess up older records that are reconciled.

 

If you haven't yet reconciled your 2020 records, you can still enter an inventory adjustment. But just in case you've already closed your books, what you can do is to create a journal entry and then make sure to consult this with your accountant to ensure the previous year and current year's books are accurate.

 

I’m adding a link here where you can search for an article that will help you if you need some information or procedures while using QuickBooks Online. Help articles.

 

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Rainflurry
Level 13

If I forgot to enter an inventory adjustment for end of '20, what should I do now?

@stevepettit72 

 

It will affect 2020 and 2021 because EOY20 inventory is also BOY21 inventory.  The bigger question is how does this change affect cost of goods sold (COGS).  Is COGS over/short by the same amount between your tax return and QB? 

 

If you're just changing your EOY inventory amount (and all other variables like purchases stay the same), you will need a corresponding entry to COGS.  If you increase your inventory, you will decrease your COGS, thereby increasing your net income.  If you need to decrease inventory, you will increase COGS, thereby reducing net income.  If you can provide more info, I will try and help further. 

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