Inventory Modified Instructions
Starting Balances > Inventory
Starting Balance Inventory Instructions
If you need to set up Inventory Items Quantity
Owned
and Average Cost starting balances use a Journal Entry.Debit Entry
Select the account
Inventory On Hand if using the Perpetual Inventory Method or Inventory - cost if using the Periodic Inventory Method
, then the inventory item, and lastly enter the quantity and total cost.Credit Entry
The offsetting balance is posted to the
Retained Earnings
account.Perpetual Method
Periodic Method
Note: Column - Item and Column - Qty check boxes need to be checked
After entering your items, if using the Periodic Inventory Method you need to go to Reports and select the Inventory Revaluation Report which calculates and assigns the average cost to the items and updates the Balance Sheet Inventory Amount. The average cost is calculated by dividing total cost by quantity.
Manager Instructions state that you need to adjust your inventory due to how beginning unpaid sales and purchase invoices are entered. If you follow my revised instructions for entering unpaid Sales Invoices and Purchase Invoices, no adjustments are needed.