[pencilpusher]

I ran the balance sheet for January and the inventory states a negative $9K. How does this happen? Is this an accounting issue or a software issue? Please help.

[hamzashakaa]

Actually this should not happen because you can't sell inventoy more than you have. Maybe a duplicate entry was recorded.Try to take the beginning invetory (in quantities) on 1/1/2009 and add the purchases (in quantity) during the month and then deduct the sales (in quantities) if the result is negative it means that there is a mistake in recording the entries.

[codyman144]

Right, something was entered wrong or a mistake was made somewhere. I don't know what software you are using but you should run the account detail on that account and look at every entry that has posted.

Do you use reversing accruals? If so is it possible you did not re-accrue for something and the reversal from last month is sitting in the account with no offset. Also are all your purchases posted to the ledger account? Could be that you have posted the deductions from inventory but none of the additions.

Basically what you need to do is called an Account Reconciliation - Justify your balance and explain all the activity for the period that led you to that balance.

[pencilpusher]

I found the problem. The invoices were dated prior to the purchase order date. The invoices were pulling from inventory which was causing a negative. Even though the problem would correct itself after time, it so happened to fall on the end of the month. That completely screwed me up.

Thanks for your answers.

P