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Inventory adjustment cost of goods

I am running QBEnt Platinum Retail Edition with the advanced inventory module.

When I count my physical inventory at the end of the month I often need to make a change to the quantity on hand, and/or the average cost calculated.

When I make an inventory adjustment in the inventory module, QB defaults to an "inventory adjustment" cost of goods account. It does this whether the change is quantity or value. My question is, should the account adjusted actually be to the inventory - asset account. Maybe quantity as an inventory asset account adjustment, and value as a cost of goods adjustment? Any ideas would be helpful.

Thanks, Ellen

Solved
Best answer 12-10-2018

Accepted Solutions
Established Community Backer ***

"and/or the average cost calculated." Why would you need...

"and/or the average cost calculated."

Why would you need to change this? The program is already managing this part.

"When I make an inventory adjustment in the inventory module, QB defaults to an "inventory adjustment" cost of goods account. It does this whether the change is quantity or value. My question is, should the account adjusted actually be to the inventory - asset account."

The function you are using is Already you, working IN the asset account, by reference to specific items.

"Maybe quantity as an inventory asset account adjustment, and value as a cost of goods adjustment?"

Never consider those as separate. The Cost is associated to the items. They are the Same Item. The COGS entry will be the "changes" bucket for Value. You don't typically Change Average Cost, and that is why I asked about this as my first comment. This is already coming from your Actual Purchases.

"Any ideas would be helpful."

You might adjust for Quantity due to damage, theft loss, etc. You might adjust qty AND value because you put back into stock something you previously removed, or created a new thing out of two other things (down $ = up $, for different item names).

Simply adjusting Average Cost is a rather odd task to be doing.


1 Comment
Established Community Backer ***

"and/or the average cost calculated." Why would you need...

"and/or the average cost calculated."

Why would you need to change this? The program is already managing this part.

"When I make an inventory adjustment in the inventory module, QB defaults to an "inventory adjustment" cost of goods account. It does this whether the change is quantity or value. My question is, should the account adjusted actually be to the inventory - asset account."

The function you are using is Already you, working IN the asset account, by reference to specific items.

"Maybe quantity as an inventory asset account adjustment, and value as a cost of goods adjustment?"

Never consider those as separate. The Cost is associated to the items. They are the Same Item. The COGS entry will be the "changes" bucket for Value. You don't typically Change Average Cost, and that is why I asked about this as my first comment. This is already coming from your Actual Purchases.

"Any ideas would be helpful."

You might adjust for Quantity due to damage, theft loss, etc. You might adjust qty AND value because you put back into stock something you previously removed, or created a new thing out of two other things (down $ = up $, for different item names).

Simply adjusting Average Cost is a rather odd task to be doing.


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