QB RECOVERY - Quickbooks Negative Inventory

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QB RECOVERY Quickbooks Negative
Inventory

• QuickBooks Negative inventory causes issues in
  your company data file. QuickBooks Negative
  Inventory is caused by entering sales
  transactions before entering the corresponding
  purchase transactions, i.e., you sell inventory
  items that you do not have in stock. This article
  explains QuickBooks negative inventory - its
  causes and effects on your company file. It also
  outlines steps required to fix issues arising
  from negative inventory.

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Quickbooks Negative Inventory

• WHEN YOU SELL ITEM THAT YOU HAVE ENTERED
  INTO YOOR COMPANY FILE
• You purchase items using the Items Tab on an
  item receipt, bill, check or a credit card
  charge, debiting inventory and crediting A/P,
  Cash, or Credit Card Payable.
• You sell items on invoices or on sales receipts,
  but never more items than you have on hand.
• The sales transaction actually records two
  transactions
• The Sales/Receivable transaction, debiting A/R
  and crediting Sales
• The Inventory/COGS transaction, crediting
  Inventory and debiting COGS.

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Quickbooks Negative Inventory

• WHEN YOU SELL ITEMS THAT YOU HAVE NOT ENTERED
  INTO YOUR COMPANY FILE
• The invoice records the Sales/Receivable
  transaction as expected.For the Inventory/COGS
  transaction, QuickBooks assumes that the average
  cost of the items not on hand is either The same
  average cost as the items you had on hand OR
• The Item Cost from the Item List.
• QuickBooks records the Inventory/COGS transaction
  using the assumed cost.

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REMINDERS

• The Inventory/COGS transaction report never
  appears on the transaction, but you can see it by
  running the Transaction Journal report.
• Bills, checks and credit card charges with
  Inventory/COGS adjustments will appear on the
  Transaction Detail by Account and Account
  QuickReport for a Cost of Goods Sold (COGS)
  account.