Clearning up negative balance in Inventory Asset account?

I can help you fix the negative balance in the Inventory Asset account, VanguardAccounting.

When an inventory item shows a negative asset value, it means you have sold what you do not have in stock. I've got the instructions on how you can resolve this. 

You can run the Inventory Valuation Summary report and adjust the transaction dates to fix negative inventory. Here are the steps:

1. From the QuickBooks Reports menu, choose Inventory, then select Inventory Valuation Summary.
2. QuickZoom an item that is showing incorrect values by double-clicking the item name. This opens the Inventory Valuation Detail report for the item. The transactions associated with this item are listed in order by date.
3. QuickZoom the first Bill listed to open the Enter Bills window.
4. Change the date on the bill to a date earlier than the first invoice listed on the detail report you opened in Step 2.
5. Click Save & Close to record the bill with the new date.
6. Repeat Steps 2 through 5 for each incorrect item.

To adjust the transaction dates:

1. Select Reports > Inventory > Inventory Valuation Detail.
2. Select the Dates drop-down arrow, then select All.
3. Scroll through the report to an item that is showing a negative amount in the On Hand column.
4. If you can do so legitimately, adjust the dates of the bills and/or invoices so that the bill dates are before the invoice dates.
5. Repeat steps 2 through 4 for each item with a negative amount in the On Hand column.

That should do it! Moving forward, you can use a sales order since it's a non-posting type of transaction. Please check this article for the detailed information and steps about fixing negative inventory and how to avoid it from occurring: Fix negative inventory issues in QuickBooks Desktop.

I'm always here to help if you have any additional questions about inventory.

My balance sheet still shows a negative balance, a quite large one. I am trying to understand how to make this 0, since we have never had, and never will have inventory that should be in this account. Should I make a journal entry for the difference?

Thank you.

Hello there, @VanguardAccounting. Thanks for getting back to us. 

There are possible causes why there's a large negative balance in the inventory. When adding sales transactions in the system before entering the corresponding purchase transactions will lead to a negative inventory. 

Since you never had inventory items, and haven't sold them, we can manually delete the inventory items (accidentally set up or recorded) in the company file. Here's how:

1. From the Lists menu, select Item List.
2. Select the item you want to delete.
3. From the menu bar, select Edit and then Delete Item.

About creating a journal for the difference, it would be best to reach out to your accountant. They can provide accurate information about handling entries and account that you'll be using to make sure everything goes well. 
 

If you're trying to find one, you can visit the Find a ProAdvisor website to look for an accountant or bookkeeper near you that offers their expertise in Quickbooks. Then, enter your region or location in the search bar. You can then click the Search button and read reviews, then select recommended accountants in nearby areas. 

I've added a few articles below where you can gather additional details about fixing issues arising from negative inventory:

• Fix negative inventory issues in QuickBooks Desktop.
• Learn how to add, edit, and delete items in QuickBooks.

Let me know if you have other concerns about QuickBooks. The Community team is always here to help. Take care always and have a good one.