Items can be entered using any of the following transaction
types:
-
To increase inventory- bill, credit card, check,
inventory adjustment.
-
To reduce inventory due to items sold-
invoice, sales receipt, statement charges.
- To decrease inventory - inventory adjustment, bill credits,
credit card refund, credit memo.
An inventory item represent
materials or parts you buy, track as inventory, and then
resell.
To record the purchase of items, you use the "item tab"
on the transaction.
As you read this article,
reference to the item tab is in red and reference to the
inventory item is in blue. They are not links
To record a purchase from a vendor for inventory, the
quantity and inventory item is entered on the item tab
of the transaction. Any of these transaction types, that have
used the item tab and
also have an inventory
item will appear on the inventory valuation report.
The inventory valuation report will not include inactive
items, so be sure to print all period end inventory
valuation reports before inactivating them. Otherwise,
you may find yourself looking at December 31st, last
year statements after making inventory items inactive
and scratching your head trying to figure out why your
inventory valuation report no longer agrees. (Sidenote:
All other reports will include inactive names and
accounts as long as there were balances for the
reporting period).
On the other hand, the balance sheet account inventory
can include a much broader range of transactions.
Not only will it include those same transactions found
in the inventory valuation report but it will
include transactions that have used the item tab with
non-inventory items.
Non-inventory items include service, non-inventory
parts, and other charges. If during set-up of
these non-inventory items,
the account inventory was erroneously chosen as
the posting account, any transactions using this
item will appear in the balance sheet account
inventory but not the inventory valuation report.
The balance sheet will include items erroneously made
inactive that still contained a quantity and a value,
the valuation report will not.
Transactions that
used the expense tab
not the item tab
with a
posting account of inventory will appear in the
balance sheet reports on inventory. But as previously
mentioned, will be omitted from the inventory
valuation report (no item tab
used).
To discover the root of the differences
between the two reports, produce the following
report:
From the reports menu > Select Company & Financial >Select
balance sheet standard report > drill down on the inventory asset account and change
the dates to the period you are reviewing >from
the report button bar, choose "type" from the "sort
by" drop down box >also from the report button bar, click on modify
> the lower left
of the display tab has a selection window named columns; place an additional
checkmark next to item (about 35th on the list of
choices) > click OK.
Look for any of the following
problems:
Do you see any transactions missing an item name? These transactions
did not use the "item tab"
and will not appear on the inventory valuation report.
You may discover that you used a transaction type that
does not allow for entering "items" or "quantities".
For example, journal entries do not have a field
to enter an "inventory item" or "quantity" A
second example would be a transaction entered directly
into the checkbook register; there is no opportunity
with this method to enter an "inventory item" or
"quantity"
Do you see transaction types without
an item, but when you drill down to the original
transaction, you have
correctly used the item
tab and see that indeed, an
inventory item was entered?
The answer may be found in discovering what accounts
were chosen during set-up of the item. Research these
problem items,
From the list
menu > choose items > highlight the inventory item in question > Ctrl+E to edit >
look at the accounts selected. The Inventory
account should not be used in either of these
locations. QuickBooks handles posting to the
account "inventory" behind the scenes. When the
goods have been sold, QuickBooks needs to know
how you would like to see the income reported (enter
an income type account) and to what account you
would like to see the cost of that sale reported
(enter an expense or cost of goods sold type account).
Do you see inventory adjustment
transactions without an item? When using the
transaction type "inventory adjustment", QuickBooks
handles the posting to the account "inventory" behind the
scenes. Do not use the account "inventory" on
these transactions,; instead, select an
expense or cost of goods sold account.
Was an inventory item made inactive
while it still had a quantity and value? The
value will appear in the balance sheet inventory report
but not on the valuation report.
If you need help making corrections, call
or
to discuss options and prices. We
can solve many problems using remote access, telephone
or e-mail support.
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