AboutKarin Hostetler Expertise I am a QuickBooks certified Professional Advisor and can answer questions on Quickbooks Basic and Pro, all versions through 2008.
Experience I have worked with Quickbooks since version 1, and have had a tip published on the Intuit website. I work exclusively with small business owners in setting up Quickbooks, giving on-going support to tweak the reports, resolving data issues and correcting problems. I offer monthly, quarterly and yearly tune-ups to prepare the clients data for presentation to their CPA at year end
Publications Intuit Pro-connection
Education/Credentials I have a degree in Administration and Management with 20 years of hands on business experience in many fields
Expert: Karin Hostetler Date: 5/21/2008 Subject: Correcting a Bad Average cost
Question I have a bad average cost in QB for a part, consequently COGS is extremely overstated, for each sale. The previous Accountant would journal inventory and COGS for the difference but you should never journal inventory. I am stuck, I don't know what to do about the false COGS expense that is on the P&L. I have since corrected the item number, but what do I do for the old transactions? COGS is way over stated. Thanks for all you do for us, it is genuinely appreciated!!!!! Serena
Answer Hi Serena,
If COG is overstated, can I safely assume that your inventory is understated?
If that is the case, what you would do is do an inventory valuation adjustment using the cost of goods as the adjustment account, this will reduce the cost of goods (which is overstated and increase your inventory value)
You will find this option in various places but always at the bottom of your item list under activities (Adjust quality value on hand) and make sure you put a check in the value adjustment box. Keep the number of items the same and put in what the actual value of the item should be. This should be a number higher than what the current value is.
