The Inventory Detail Transaction Report (or Transaction Tab of Inventory Maintenance / Inquiry) can show Negative Quantity Adjustments automatically created by the system as a result of transactions for average and standard valued inventory items. If an average or standard cost item has a negative on hand quantity (item over-sold or over-issued), and a purchase order receipt (or Bill of Materials Production entry, Work order completion, or Inventory Receipt) is processed for a different value (cost), adjustment transactions are generated. These are automatically generated because the system must make an adjustment to account for the difference between the cost of goods sold on the invoices (or issues) and the cost of the goods received.

The transaction types are PZ (Purchase Order), BZ (Bill of Materials or Work Order), and IZ (Inventory Transaction Entry). These transaction postings to GL are automatically generated from the module that updates the quantity on hand for an item.


AVERAGE ITEM started with 120 on hand @ $9.50 each.
An invoice was processed for 200 @ $9.50
– the item has -80 on hand with an total value of -$760
A receipt is then processed for 80 @ $10.50 generating a “PZ” detail transaction for the difference in cost (10.50-9.50=1.00*80=$80 adjustment)

Here’s how that can happen:
Open Inventory Management / Main / Inventory Maintenance, select an average or standard cost item, and note the item’s unit cost and the quantity on hand.
Open Sales Order / Main / Invoice Data Entry; create an invoice using the item from step 1 and a quantity that exceeds the current on hand. Post the invoice.
Open Inventory Management / Main / Inventory Inquiry, select the item, and verify the on hand quantity is now negative.
Open Purchase Order / Main / Receipt of Goods Entry, and create a receipt for the item using a cost that is different (higher or lower) than the cost noted on step 1.
Open Inventory Management / Main / Inventory Inquiry. On the ‘Transaction’ tab, notice a Negative Quantity Adjustment transaction now appears.

The adjustments the system creates are intended to maintain a balance between the value in Inventory Management and the inventory value in General Ledger. If these become out-of-balance, journal entries can be processed in General ledger to correct the balances.
…paraphrased from Sage Knowledgebase ID 822.

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