Inventory adjustment account

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Posted on by Nirmala Karunarathna

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Can we keep same G/L account for both inventory account and inventory adjustment account ? Will that be an issue for inventory valuation report when reconciling inventory value with G/L?

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Bilal Haider 412 on at

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Same G/L account can be used. Operationally there will be no error.

But ideally separate account should be used. Otherwise you will not get correct data in reporting.

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Community Member on at

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Nirmala,

Adding to Bilal's reply... BC will allow you to have the same G/L Account for Inventory and Inventory Adj. As an Accountant, Accounting practice, GAAP, FASB, IFRS dictate that the Inventory Account, a Balance Sheet account, not be the same as the Inventory Adjustment account, an Income Statement account, in the COGS section.

Hope this helps.

Thanks,

Steve

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seckpin 35 on at

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There is no restriction in Business Central in mapping same G/L accounts to any of the posting group fields. However, it is unusual to use the same G/L account for the Inventory Account (which is a Balance Sheet account to show the value of stock on hand) and the Inventory Adjustment Account (which is an Income Statement account for capturing stock value loss/gain). This does not seem correct financially.

E.g. let's say there's 1 unit of stock missing from your stock count and you post a negative adjustment. It will then debit Inventory Adjustment account and credit Inventory account, which will be the same account in your case with a net effect of zero to your G/L. This means you are basically not reducing the stock value nor reporting the stock loss value.

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Teddy Herryanto (Th... 14,284 Super User 2025 Season 2 on at

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There is no restriction. However, you should ask your Finance if you really want to do it. It is not right to put both on the same account.

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KAHUJA 44 on at

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No, They should be different in order to reconcile inventory valuation report.

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