How to handle accounting entries in transactions involving negative stock?

[Basawaraj_Savalagi]

Hi All,

1. I have allowed negative stocks by checking “Allow Negative Stock” check box in stock settings.

2. I created an item ITEM1 and assigned buying price of INR 100 and selling price of INR 200.

3. I created a DC and Invoice for this item with quantity = 1.

So the stock balanace is -1.

4. Now I have created a purchase entry and purchase invoice for ITEM1 with quantity = 1.

Now in balance sheet it shows…

How to handle this??

I read the below mentioned thread…

Perpetual Inventory Not Working If We Allow Negative Stock

For creating accounting entry, system should not valuation rate of the item. But item delivered at negative stock level won’t have any valuation rate. Hence no accounting entry is booked at that point. It will be booked when you purchase the item. Based on the valuation rate of those purchased item, accounting entry will be posted for items delivered at negative stock level.

and tried to post a jv…

and got following error…

Please suggest.

Thanks

[rmehta]

@Basawaraj_Savalagi Quick advice. Don’t do negative stock. It will instill a lot of discipline in the users.