Defining Negative Tier Adjustment Postings

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Inventory Negative Tier Adjustment posts an adjustment to the inventory and the adjustment accounts for the cost difference between the negative and positive cost tiers.

Expand/Collapse item  Example with a FIFO item

If a FIFO item has a negative cost tier of 10 units costed at $10.00 each, and a positive cost tier with 20 units costed at $9.50 each, the difference in cost is $5.00 which is equal to ($10.00 x 10) - ($9.50 x 10). The following general ledger postings are made.

Negative Tier Adjustment:

G/L Account

Debit

Credit

 

Inventory

5.00 

 

 

Adjustment

 

5.00 

 

For more information, see Account Maintenance.