Cost of Sales Adjustments
You may notice that some of your item transactions result in an automatic cost of sales adjustment.
There are two things that can cause these Cost of Sales Adjustments:
- Negative inventory preference is turned on and item is sold causing a negative quantity
- An Item has been received on an order that wasn’t converted to a bill, and then it was sold
The reason for the cost of sales adjustment is because when these items are sold the cost of sales recorded is recorded at an estimated cost. An actual cost is recorded when the receive items transaction is turned into a bill or when items are purchased to bring the quantity on hand out of a negative value.
The longer the order stays an order or the item is left in negative and the more sales of the item entered, the more cost of sales adjustments you will see.