Cost Adjustment Procedures

Use the Cost Adjustment Procedure option to adjust cost for usage, which adjusts the cost by generating a transaction to balance the sum of the transactions to the balance record, or to adjust value to market, which reduces the value by generating a transaction in which the quantity on hand is multiplied by the lesser of the Average Cost or Market Cost boxes.

The Cost Adjustment For Usage procedure should be included in month-end procedures. Failure to complete the cost adjustment in a timely manner may result in an imbalance between the subsidiary and general ledger accounts for inventory and cost of sales. The procedure generates transaction type 0 records in the inventory activity file to balance with the inventory balance file. Cost adjustments may be either positive or negative, depending on beginning and ending values for the time period indicated.

The Cost Adjustment For Usage procedure should be completed immediately prior to updating the inventory during physical count to account for any edited quantities during the Enter Physical Inventory Count option or for any changed quantities or values that occurred as a result of unlocking inventory. If inventory was not unlocked during physical count and if the edit function was not used during the Enter Physical Inventory Count option, the cost adjustment for usage may be completed immediately prior to creating the physical count work file.

The Cost Adjustment for Market procedure generates transaction type 5 records in the inventory activity file and updates the inventory balance file.

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