Inventory Adjustments in QuickBooks

Jennifer answers a reader's question about inventory adjustments

Tiffany writes:

I need to make inventory adjustments, but do not want to alter the financial statements. I set up my Items last year in QuickBooks, but didn’t use them because I was confused about how QB computed cost of goods sold, and we didn’t show any detail on our invoices.

We want to start fresh this year, so I need to adjust the inventory correctly. Can you give me any advice? Thanks.

Get help with QuickBooks here

Get it Now ~ Free Ebook
"7 Time Slashing Strategies for QuickBooks"

Available for immediate download

Primary Email

Enter Your First Name


Your e-mail address is totally secure.
I promise to use it only to send you Adventures in QB.

Time to Upgrade? Get Up To 20% Off QB Products + Free Shipping

My reply:

The short answer is that the adjustment must impact the financial statements – there is no way around it. This is a good thing – the cost of goods sold (COGS) must show in order for your Profit and Loss to be correct for last year. Do this by using the Cost of Goods Sold as the adjustment account in the screen where you adjust your inventory.

If you have been recording your Item purchases in QB during the year, before you make the adjustment I’d like to explain a few things so you understand why. Click the links below to read more about these advanced topics:

Need More Help? Contact Jennifer

  1. Home
  2. Inventory Adjustments

Easy & Inexpensive QuickBooks Help

27 QuickBooks mistakes

"Conquer 27 Frustrating Mistakes that Steal Your Time, Sanity & Money!"

QB Mistakes are
Costly & Unnecessary

27 QB mistakes & their solutions, demonstrated in detail.

Two FREE Bonuses Included! Only $9.97.
Instant Download.

Learn More Here


Add to Cart

COGS ebook cover

"Crack the COGS Code"

Too Little COGS?
Too Much Taxes!

QB does NOT use the traditional COGS formula to compute your COGS!

Only $9.97. Ebook.
Instant Download.

Learn More Here


Add to Cart