1. That is typically not Income, since it has nothing to do with sales. It is expense or a COGS type of account named for Inventory Adjustment, or Waste, even.

2. The top of every PO has the Close icon.

3. That happens when no one Purchases items but they sell them, anyway. Don't try to make More entries, now. No item receipt, no bill to pay later. You take a Physical Count and you Adjust inventory to correct it. Look at previous purchases, to see if they posted to Inventory Asset directly or to COGS directly. Whatever they used from Bills and Checks to buy this stuff, bypassing listing the items, that account is where your missing Values are posted and that account is what you would pull from, top of the adjustment screen.

Of course, this is a problem if these errors are Historic.

4. If they were at 0 qty and 0 value, when they "repurposed" that item, they didn't make a mess of the Accounting, but they had meaningless data on the activity reporting, such as Item Profit and Sales analysis.

It is too late to "change" that. I don't know what you mean by "to a new real item" because think about it: this is the Real Item, for that entry, now.