Your software allows the issue or sale of an item, even if there is not enough quantity on hand. An item using the LIFO or FIFO valuation method, results in a negative cost tier. A warning appears when you have exceeded the on-hand quantity, but you are allowed to proceed. The last cost for an item is used for the posting of the sale when the negative (over distributed) tier is created. If the unit cost is zero at the time of an issue, an entry is not posted to the general ledger.

To clear negative cost tiers

1 On the Inventory Maintenance Period End menu, click Inventory Negative Tier Report.

2 Click Print. The report lists each item that has a negative quantity in a cost tier. When an item has a negative cost tier, it can be adjusted against a positive cost tier.

3 On the Inventory Maintenance Period End menu, click Inventory Negative Tier Adjustment.

4 Click Print. The register prints all LIFO/FIFO items that have a negative cost tier for which there is a corresponding positive cost tier that can be used to adjust the quantity.

5 After printing the Negative Tier Adjustment Register, click Yes to clear the negative tiers. If there is a difference in cost, you will need to print and update the Daily Transaction Register in order to post the entry to the general ledger.