Do you need to do the adjustment on the inventory asset account, or do you need to adjust the inventory you have in stock?

To change the balance of the total amount of inventory you have, you must adjust the inventory levels. For example, you have two products that you sell. Currently your reports indicate you have 100 Product A worth $1000 and 50 Product B worth $5000.

If your total inventory after a count is really $5900, you can't just update the asset account. Which product has changed in value, A, B or both? In this case, it is probably that you really only have 90 of Product A in stock and therefore it is only worth $900.

So go to the Inventory Adjustment module to adjust the inventory quantity and cost of your Product A. This cannot be done in the General Journal because otherwise you would not be affecting the actual product you have in stock.

Hope this helps

I dont need to do the adjustment on the inventory asset account, nor need to adjust the inventory in stock. I am trying to do the year end adjustment entry, to CR#1510-Inventory , DR#2010 account payable; Both this account # not in the list as options. I simply couldn't do this adjustment entry in general journal window.

Please advise.
Judy

That is correct, in a normal setup of the program, you cannot post to these accounts in the General Journal. Sorry but to me, adjusting the inventory asset account (1510) also means you must change the quantity and/or value of the inventory you have in stock. I am assuming you have inventory in stock in the inventory module or it wouldn't be linked under a normal setup. Having mentioned it in my last post, and you not correcting me, I still assume you sell inventory products. If the value changes on the balance sheet, then the value must change on your Inventory Summary report. To have that happen, you must adjust the level of inventory and/or the dollars of an item or items because the cost is wrong.

The fact that you have to adjust Accounts Payable in the same entry, means that there must be a vendor account that also needs to be adjusted.

So the entry should be in the Purchases module to affect the Accounts Payable account and list at least one inventory item that is linked to account 1510.

You cannot post directly to a linked inventory account or the linked accounts payable account in the general journal because the balances of each come from individual components (eg. the value of each item in stock for inventory and the total of all invoices owing in accounts payable respectively). For future information, Accounts Receivable and Vacation Payable cannot be posted to in the General Journal either because they are the total accounts linked to the Sales and Payroll modules respectively.

If you are not sure which vendor or item(s) you need to adjust, you will have to talk with your accountant to find out the nature of the entry or some other workaround that might work. I can think of another way to do it in the General Journal (create your own unlinked inventory account and use Accrued Liabilities instead of Accounts Payable), however, I never do that without talking with the accountant to make sure that there was not any specific inventory and in this case a vendor account history that needed to be adjusted so that the nature of the entry is not altered.

BTW, I ignored the information about Reconciliation and Deposits in your original post because I did not understand what that had to do with a General Journal entry. Those modules primarily deal with bank, credit card and loan accounts (Reconciliation) or money being received from Receipts (Deposits) and neither usually affect inventory directly.

Sorry I am confused by your issue. If anyone else has any ideas, please jump in.