Average Cost Info Polluted

[ackland62]

Due to a large number of transactions being done incorrectly, the average cost information has become polluted. What would be the easiest way to reset the average cost to the purchase cost?

[suzannemead]

You can go to Vendors>Inventory Activities>Adjust Inventory>Adjust Quantity/Value on Hand. You will need to correct the cost and post the difference to some type of expense account. You may want to create an account for this purpose - Inventory Adj. Expense.

[Joe Williams]

Use the Inventory Adjustment and select Value Adjusntment. DO NOT change the quanity, just the TOTAL value of the items. Be sure that the date for ten adjustment is just before the date the purchases were entered correctly. QB will "adjust" all of the COGS from the adjustment date!!!

[RobJoy]

The average cost is calculated from all preceeding transactions, so the timing of adjustments is critical. Look at an Inventory Valuation Detail report to see the progress of the average cost. Whenever a sale is recorded the cost used to calculate COGS is that in effect on that date. If you adjust the cost after that date, previous sales will not be recalculated, only the ones that come after.

Could we talk about the incorrect transactions?

[ackland62]

Originally Posted by RobJoy

The average cost is calculated from all preceeding transactions, so the timing of adjustments is critical. Look at an Inventory Valuation Detail report to see the progress of the average cost. Whenever a sale is recorded the cost used to calculate COGS is that in effect on that date. If you adjust the cost after that date, previous sales will not be recalculated, only the ones that come after.

Could we talk about the incorrect transactions?

What would you like to know about the transactions?

[RobJoy]

What were they? It is too easy to get the inventory costing in a mess, then make more mess trying to put it right, so I'm wondering if we could steer you towards correcting those transactions, rather than entering adjustments, which ought not to be used unless they're unavoidable.

For instance, if someone recorded 100 items @ $5 instead of 10 items at $50, there is a better answer than an adjustment.