Inventory Valuation vs Balance Sheet Error due to Average Cost

Welcome back to the QuickBooks Community, astanleyCTG. I'll be sharing details on the difference between Inventory Valuation vs Balance Sheet reports in QuickBooks Desktop. Then, ensure that you'll be able to see both reports with accurate details.

The Balance Sheet report pulls information from the accounts whether they are associated with items or not. The Inventory Valuation draws details from items only. That said, entries using inventory items appear on both reports but transactions without inventory items show only on the Balance Sheet report.

Here are transactions that will show on the Balance sheet but not the Inventory Valuation reports:

• Bills, checks credit card charges with the Inventory Asset account on the Expenses Tab.
• Journal entries using the Inventory Asset account.
• Inventory adjustments offset to the Inventory Asset account instead of a COGS account.

To fix the error and any discrepancy that causes inaccurate details on the report, I reccomend following the different recommended solutions on this article: Balance Sheet and Inventory/Stock Valuation reports show different amounts for an Inventory Asset ac....

Lastly, you may refer to this article on how you can make any changes to your item details in QuickBooks Desktop: Add, edit, and delete items.

Don't hesitate to click the Reply button if you have any other questions about Inventory Valuation vs Balance Sheet reports in QuickBooks. I'm always here to help you out.

Thank you.  I have already completed the review. There are no other discrepancies except for the change in cost on the Balance sheet vs the Inventory Valuation.  See attached example.

Thanks for following up with us, @astanleyCTG. I'm here to help sort your average cost out. 

You can edit the average cost of an item that you've changed. This way, the two reports will match in QuickBooks.

Before doing the process, I'd suggest consulting your accountant. They'll be able to give you the best accounting advice for this situation. If you don't have one, check out this link to find one near you. 

Here's how to adjust the average cost of an item:

1. Go to the List and select the Item List.
2. Right-click anywhere on the list and select Adjust Quantity/Value On Hand.
3. Change the Adjustment Type to Total Value.
4. Enter the Date & Adjustment Account in the header.
5. Enter the first Item you want to change.

Find out more about managing average cost in QuickBooks Desktop through the following articles:

• Average Costing vs FIFO: What’s the best way to analyze inventory costs?
• FIFO Options in QuickBooks Desktop Enterprise

Just in case you wanted to check moreover about inventory assets and COGS tracking, you can refer to this article: Understand inventory assets and cost of goods sold tracking.

You can always get back to us whenever you have other concerns or questions. I'm always here to help you anytime. Take good care, @astanleyCTG.