Automatic Inventory Adjustments made when Inventory is Negative
The reason for these adjustments is complex, but two entries are made in inventory history when inventory becomes negative, this is to make sure we use the latest dept cost if you are running negative inventory. There are no records in invoices or elsewhere which is why when you click on it no records exist.
1) Say beer balance was -1000 at $0.80
2) Then we get a new transaction of 500 at $0.50, so the balance becomes:
(-1000*0.8 + 500*0.5)/(-1000+500)=-550/-500=1.1. that means beer cost becomes 110%, which is wrong, so the system has to make the adjustments to compensate. To do that, we insert two more entries:
a) 1000*.08 to offset the balance
b)-1000*.05 to make the old balance
