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Old 07-09-2009, 12:33 PM
mtparra mtparra is offline
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Join Date: Jul 2009
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Help Understanding Journal Entries Created by Point of Sale


I'm using QB Point of Sale 8.0 and exchanging data with QB Pro 8.0

After I conducted a physical inventory in Point of Sale the following journal entry was created in QB:

POS Inventory Adjustment Account 7,473.72 DEBIT (this is an expense account for tracking shrinkage)
Non-Inventory Asset 197.40 DEBIT
Merchandise Sales 2,049.44 CREDIT (an income account)
Inventory Asset 5621.68 CREDIT

Why would a physical change in inventory touch my Merchandise Sales account?

Iím still wrapping my head around this double entry accounting so I may very well being missing something obvious. Iím used to seeing journal entries that touch the the Inventory Asset and POS Inventory Adjustments accounts when items are removed or added to inventory using quantity adjustments in the POS (i.e. not as the result of a sale or return) But what's going on with these entries that touch the Merchandise Sales account?

Why would a physical change in inventory not from a sale or return have any effect on the sales income account?

Any enlightenment appreciated.
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