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Evo-ERP and DBA Classic >> Accounting >> INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
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Message started by sheri on 06/22/09 at 13:45:23

Title: INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
Post by sheri on 06/22/09 at 13:45:23

Can someone help me to determine why my inventory adjustments show up as "cost of goods sold" on the detail trial balance report? We have an account set up for adjustsments to inventory and it is an asset account so I don't what piece of the puzzle is missing.
Thanks for your help!!!
S

Title: Re: INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
Post by GasGiant on 06/23/09 at 03:48:17

Inventory adjustments go to the account set up by the Class of the item, just as if they were sold or consumed on a Work Order.

Title: Re: INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
Post by sheri on 06/23/09 at 07:21:39

Thank yo for your reply. I am still somewhat confused since this distorts our "cost of good sold" account. The class of our inventory items are asset acounts.

Title: Re: INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
Post by GasGiant on 06/23/09 at 07:38:44

Every Class has 9 GLs covering the various aspects, an Asset/Expense GL, a COGS GL, two Sales GLs, WIP GL, etc. The Help file entry for SM-C has a complete explanation of how to use it.

Title: Re: INVENTORY ADJUSTMENTS SHOW IN TRIAL BALANCE
Post by cathyh on 06/23/09 at 08:16:49

I am not sure if you mean all adjustments or just certain ones are distorting your COGS. Adjustments made to items used in production or sold that are due to damage, "loss", etc. really should be considered true COGS.

When we need to make an adjustment that should not affect COGS, such as an item sent as a promotion or warranty, R &D, or something used in the factory, we issue the part to a work order (I type) that we have created using a non counted part number, such as "PROMO", or "R&D" whose class code uses a different account for COGS than our usual one.