[cchall59]

The company I just started to work for has never really kept an accurate inventory count and now we have all items entered and correct. There is a large inventory adjustment that needs to be done to correct the inventory. Would it be okay to take the adjustment against cost of goods and retained earnings. I say cost of goods because the company was selling products at a lose and really there has been no profit is the reason I say against retained earnings. Any suggestions or thoughts would be appreciated.