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digitalstagebooks
September 23, 2024
Question

Negative Purchase Return category. How to fix?

  • September 23, 2024
  • 1 reply
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Under current assets on Balance sheet it shows Inventory line item and then Purchase Return line item with a negative value. This is an amazon reseller who purchased inventory, listed it on Amazon, and then sold a product but then that product was returned by the end customer back to Amazon. Should "Purchase Return" category stay negative and roll forward on the books or should it be zeroed out? If the latter, how should it be zeroed out? Journal entry against inventory value? 

1 reply

CLaTAX
CLaTAX
September 26, 2024

To fix the negative balance in the Purchase Return category in QuickBooks:

  1. Check the Return Process: Ensure the customer return was recorded correctly using a Refund or Credit Memo to adjust Inventory and COGS.

  2. Zero Out Purchase Return: Use a Journal Entry to clear the negative balance.

    • Debit Purchase Return (to eliminate the negative).
    • Credit Inventory or COGS (to reflect the return).

  3. Review the Balance Sheet: The Purchase Return account should be zeroed, and the Inventory or COGS account adjusted properly.

  4. If you need help creating the journal entry, you can reach out by filling out our contact form.
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