<< Click to Display Table of Contents >>

PI-G  Update Actual Inventory

Purpose of Program

Use this program to replace the current inventory On-Hand and Average Cost values with the physical inventory counts and costs.  The program will adjust the counts for any inventory transactions that have occurred since PI-A  Capture Frozen Inventory was run.  You can optionally update the General Ledger to record the cost discrepancies between the old and new inventory values.

General Program Operation

Enter the Year and Phys/Inv No.  These fields will default to the latest physical inventory on file.

Enter an F if you want any adjusting transactions made at frozen cost and enter a C if you want them made at the current average cost.  There should be little difference between the two unless a long time has passed since the inventory was frozen.  In general, accountants would prefer using the frozen cost because it was the cost in effect at the time the items were frozen.  If you are on FIFO or LIFO costing, adjustments will only be made at current average cost.

Enter a Y if you want to update the General Ledger.  If so, an entry will be made to the GL "Other" journal for each item number that has had a change in value.  If the inventory value increased, the Asset (Inventory) account for the item's item class will be debited for the difference and the Cost of Goods Sold account for the item's item class will be credited.  If the inventory value decreased, the Asset account will be credited and the Cost of Goods Sold account debited.

Some people prefer to avoid all this posting and will instead make a single manual entry to the Inventory and Cost of Goods Sold accounts.  If this is your preference, answer N to the Update General Ledger? prompt and make a manual journal entry for the Difference total found at the end of the Physical Inventory Value report.

After completing the selection criteria, you are presented with a Locations listing that allows you to tag which Locations are to be included in the posting.  After tagging the appropriate Locations, click on the Go button to begin processing.

The program will replace the On-Hand quantities and Average Costs in the inventory files with the counts and costs of the physical inventory and will post the differences to the General Ledger, if the Update General Ledger? option was taken.  When finished processing, the program optionally prints the Physical Inventory Detail report, which will list the items that were updated.