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Dawn Dockrill
May 9, 2025
Question

Correcting the Inventory Value

  • May 9, 2025
  • 1 reply
  • 0 views

So I have a product that shows a unit cost of $2.49 but it should be $5.02. So let's say we have 600 items at $2.49 with an inventory value of $1,494.00. It should be 600 items at $5.02 for an inventory value of $3,012.00. I thought to correct this I would need to remove my inventory to 0, go in and change the unit cost to $5.02 and the adjust the quantity back to 600 but when I do the inventory value report still shows $2.49. I don't want to adjust the starting value just the current value. Is there another way to do this?

1 reply

Clark_B
Clark_B
May 9, 2025

You can create a Journal Entry to adjust the inventory value, Dawn. I'd be glad to share some insights about this and guide you through the steps.

 

In QuickBooks Online (QBO), direct adjustments to the inventory value are unavailable since the system operates on a First In, First Out (FIFO) basis, which prioritizes the sale or usage of older inventory items first.

 

However, you can make adjustments through a Journal Entry (JE). Before following the steps below, I recommend consulting with your accountant when creating a JE to ensure accuracy.

 

Here's how:

 

  1. Navigate to the + New and choose Journal Entry.
  2. For the first line, select an account from the Account field. Depending on whether you need to debit or credit the account, enter the amount in the correct column.
  3. On the next line, select the other account you're moving money to or from. Depending on whether you entered a debit or credit on the first line, enter the same amount in the opposite column.
  4. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  5. Enter information in the memo section so you know why you made the journal entry.
  6. Finally, click Save and Close to complete the entry.

 

For more information, refer to this article: Create journal entries in QBO.

 

In case you want to export your inventory value report or journal entry to use outside of QuickBooks, check this resource: Export your reports to Excel from QBO.

 

You can tag me in the comment section if you have any other concerns about adjusting the inventory value. I'll be around to further assist you.

D
Dawn DockrillAuthor
May 10, 2025

But I want to correct the unit cost along with the individual product value. Won't a journal entry just correct the total inventory value and not the individual product?

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GlinetteC
May 10, 2025

That's correct, a journal entry will adjust the total inventory value in your accounting records, but not the unit cost or value of individual products in your inventory, Dawn.

 

As my colleague pointed out, QuickBooks utilizes a FIFO (First In, First Out) method for inventory management. Given your specific inquiry about correcting unit cost or value of individual products, I strongly recommend consulting with your accountant. They can provide tailored advice and suggest alternative approaches that align better with your particular business needs, ensuring precise adjustments in your inventory system.

 

For a comprehensive guide on adjusting inventory quantities in QuickBooks Online, please visit the following link for detailed instructions: Adjust inventory quantity on hand in QuickBooks Online.

 

Additionally, click on impacts of inventory tracking on the Balance Sheet and Profit & Loss reports in QuickBooks Online to learn how it can affect your financial reports.

 

Should you encounter any issues or have more queries about managing inventories, please add them in the comments. I’m here to provide further assistance.

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