I am struggling with how Sage 100 is handling a Return of Goods for "Average Cost" valuation items. When the return is processed, Sage is using the average cost of the item rather than the cost used in the original incorrect receipt. For example, if I have a SKU with 100 units on hand and a per unit cost of $1.00 each and then I receive another 100 units but I mistakenly make the cost $0.10 per unit, I have a situation where I have 200 units on hand at a total value of $110 or $0.55 each. When I go to reverse the incorrect receipt using Return of Goods Sage uses the cost of $0.55 per unit rather than the $0.10 cost per unit. This makes it impossible to get the inventory balance back to the $1.00 per unit. I can see that in the General Ledger postings that Sage is hitting the PO Variance account which will go against Cost of Sales, but my concern is that this is an income statement fix and does not change the fact that your inventory is misstated on the balance sheet.
What is the best way to handle an incorrect receipt of good to fix the value of your inventory and make sure that the vendor invoice matches.
Is this something others struggle with and how do you handle this?
Thanks,
