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Level 2

Why does my inventory asset account increased when I have received and entered a bill for inventory items set up through a purchased order and the bill is received?

 
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Best answer 07-11-2019

Accepted Solutions
QuickBooks Team

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

Having an accurate inventory is important for a successful business, sasconsultingser.

 

Inventory Asset account helps you keep track of the value of the inventory that you currently have on hand.

 

When you record the purchase of an inventory item, it increases the Inventory Asset account and credits the A/P, bank, or credit card account. 

 

Here's a sample screenshot on how it looks like when you view the transaction journal of a bill.

 

 

I'm also adding this article that discusses more on Inventory Assets

 

To run reports for your inventory, you can find the steps here: How to customize Inventory Reports.

 

For more questions about inventory in QuickBooks, please leave us your comment. Thanks.

View solution in original post

Level 15

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

@RenjolynC 

 

That is a NICE graphic of the bill, the journal entry behind the bill

 

with one exception

 

A credit to A/P increases A/P - the amount payable is increased.

The Payment of the bill, posts a debit to A/P, decreasing A/P  AND is a credit to the account the payment is made from

 

a credit does not automatically mean a decrease, it depends on the type of account it is posted to

View solution in original post

QuickBooks Team

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...


Hi there, sasconsultingser.

 

Thank you for posting here in the QuickBooks Community.

 

Since you have already created a bill, I suggest to edit or change the Initial quantity on hand to make an adjustment through Inventory Starting Value.

 

Follow the steps below: 

 

1. At the top right, select the Gear icon.
2. Under List, choose Product and Services.
3. Select the Inventory item, then click edit under action column.
4. You'll be routed into Product and Services information page.
5. Click Starting Value under Quantity on hand.
6. You'll be prompt with Hold on! Changing the starting value may affect the initial value of your inventory. Click Got it!.
7. Change the number under the Initial quantity on hand to zero.
8. Click Save and Close.


Please check out this article for more details and help you to identify the items and services you are selling: Change Product and Service types.


Let me know if there's anything else I can do to help you succeed with QuickBooks.​
 

View solution in original post

9 Comments
QuickBooks Team

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

Having an accurate inventory is important for a successful business, sasconsultingser.

 

Inventory Asset account helps you keep track of the value of the inventory that you currently have on hand.

 

When you record the purchase of an inventory item, it increases the Inventory Asset account and credits the A/P, bank, or credit card account. 

 

Here's a sample screenshot on how it looks like when you view the transaction journal of a bill.

 

 

I'm also adding this article that discusses more on Inventory Assets

 

To run reports for your inventory, you can find the steps here: How to customize Inventory Reports.

 

For more questions about inventory in QuickBooks, please leave us your comment. Thanks.

View solution in original post

Level 2

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

Thank you for your response and shared understanding of the process.

 

The issue I am experiencing is the inventory asset account balance has doubled in my inventory asset account for this transaction. I do not feel that is correct. I see the AP entry for the full amount of the products purchased with an action of make the payment after receiving the bill. However, my balance sheet is reflecting the correct inventory balance. Help.....

Level 15

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

@RenjolynC 

 

That is a NICE graphic of the bill, the journal entry behind the bill

 

with one exception

 

A credit to A/P increases A/P - the amount payable is increased.

The Payment of the bill, posts a debit to A/P, decreasing A/P  AND is a credit to the account the payment is made from

 

a credit does not automatically mean a decrease, it depends on the type of account it is posted to

View solution in original post

Level 12

Re: Why does my inventory asset account increased when I have received and entered a bill for inventory items set up through a purchased order and the bill is received?

Did you convert the PO to a Bill or enter the Bill in addition to the PO? This is important and if you actually received the inventory through the PO AND entered a Bill my thought is this would lead to double inventory

Level 2

Re: Why does my inventory asset account increased when I have received and entered a bill for inventory items set up through a purchased order and the bill is received?

I think I uncovered the issue. I am working to correct steps that one of my clients initiated. When the products were initially set up, an initial quantity on hand amount was entered which resulted in the issue thus causing the duplication.   The quantity should have been zero because this is a new business with without inventory, correct. 

 

Also, my client received items that were not purchased but given to him to sell.  He entered those items with a initial quantity on hand which I do not feel is correct. Those are my two issues with is hindering my inventory balance in being correct. 

Level 2

Re: Why does my inventory asset account increased when I have received and entered a bill for inventory items set up through a purchased order and the bill is received?

These are the products in question that were received without a beginning quantity already on hand, however a beginning inventory was entered by my client. Now, I need to figure out how to adjust this information appropriately to reflect the actual activity related to the products received to just sell that were not paid for. 

QuickBooks Team

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...


Hi there, sasconsultingser.

 

Thank you for posting here in the QuickBooks Community.

 

Since you have already created a bill, I suggest to edit or change the Initial quantity on hand to make an adjustment through Inventory Starting Value.

 

Follow the steps below: 

 

1. At the top right, select the Gear icon.
2. Under List, choose Product and Services.
3. Select the Inventory item, then click edit under action column.
4. You'll be routed into Product and Services information page.
5. Click Starting Value under Quantity on hand.
6. You'll be prompt with Hold on! Changing the starting value may affect the initial value of your inventory. Click Got it!.
7. Change the number under the Initial quantity on hand to zero.
8. Click Save and Close.


Please check out this article for more details and help you to identify the items and services you are selling: Change Product and Service types.


Let me know if there's anything else I can do to help you succeed with QuickBooks.​
 

View solution in original post

Level 2

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

Thank you. It worked. Woohoo 🤗

Content Leader

Re: Why does my inventory asset account increased when I have received and entered a bill for inv...

I'm glad to hear this worked for you and you were able to get assistance here in the Community, sasconsultingser. Help is just a comment or post away if you ever need it again in the future. Take care.

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